nonrecourse loan from an unrelated bank, and purchased a boat. The two partners share all items of partnership income, gain, loss and deduction equally.a.Over the partnership’s first 3 years of operations, it reported net losses of ($580,000), allocated equally between the two partners. It also made principal payments against the nonrecourse loan of $50,000. Assuming no distributions or additional contributions were made to or by the partners over that period, what will be the partners’ tax bases in their partnership interests at the end of year 3?
b.Assume that at the beginning of year 4, I sells her interest in the partnership to L for $25,000 cash (plus assumption of I’s share of the partnership’s nonrecourse debt). How will the sale affect I’s taxable income for year 4?
c.How would your answer to part b change if the nonrecourse loan had been used topurchase real estate rather than a fishing boat?