Problem
Ted contributes a nondepreciable asset to the TK partnership in exchange for a one-third interest in the capital, profits and losses of the partnership. The asset has an adjusted basis to Ted of $24,000 and fair market value of $50,000. The assets is encumbered by a nonrecourse note of $35,000 that has not been guaranteed by any of the partners.
a. What is Ted's adjusted basis in his partnership interest after the contribution?