In the Current Year, Derek Formed an Equal Partnership with Cody

Essay

In the current year, Derek formed an equal partnership with Cody. Derek contributed land with an adjusted basis of
$110,000 and a fair market value of $200,000. Derek also contributed $50,000 cash to the partnership. Cody contributed land with an adjusted basis of $80,000 and a fair market value of $230,000. The land contributed by Derek was encumbered by a $60,000 nonrecourse debt. The land contributed by Cody was encumbered by $40,000 of nonrecourse debt. Assume that the partners share debt equally. Immediately after the formation, what is the basis of Cody's partnership interest?