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In year one, A, B, and C form a limited partnership. A contributes $4,000,000 B contributes Black Acre, a plot of land he has held for investment for...

In year one, A, B, and C form a limited partnership.


A contributes $4,000,000


B contributes Black Acre, a plot of land he has held for investment for over 5 years. It has a fair market value of $2,000,000 and an adjusted basis of $3,000,000.


C contributes $500,000 cash. C also contributes Red Acre, land he has held in investment for over 8 months. It has a FMV of $2,000,000 but its encumbered by a recourse mortgage, with a balance of $300,000. The adjusted basis of the land is $1,000,000.


What would a balance sheet look like for this?

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