Ray, Ronnie and Joe Are Partners in a Limited Partnership

Multiple Choice

Ray, Ronnie and Joe are partners in a limited partnership.Ray and Ronnie, the limited partners, each own 45 percent of the partnership and Joe, the general partner, owns the other 10 percent.The partnership incurs $50,000 of nonrecourse debt and $100,000 of recourse debt.What effect do the debts have on Ray's basis?

A) Increase of $22,500
B) Increase of $25,000
C) Increase of $45,000
D) Increase of $67,500