CCC Partnership borrowed $100,000 on a five-year recourse note from a local bank. It also purchased land for $60,000, putting $10,000 down and signing a qualified nonrecourse loan secured by the land for the balance. The partners' interests in partnership profits and losses are as follows:
|
Partner
|
Loss
|
Profit
|
|
Carol (general partner)
|
25%
|
50%
|
|
Charles (limited partner)
|
40%
|
25%
|
|
Charlotte (limited partner)
|
35%
|
25%
|
a. How is the $100,000 recourse note allocated to the partners' bases?
b. How is the $50,000 nonrecourse note allocated to the partners' bases?
c. How would your answers change if Carol, Charles, and Charlotte were all general partners?