Carson and Dan Agree to Become Equal Owners in ProClothing

Essay

Carson and Dan agree to become equal owners in ProClothing, a retailer of golf apparel. Dan will contribute $5,000 cash and a building worth $85,000 (adjusted basis of $60,000). The building is encumbered by a $40,000 mortgage that ProClothing will assume. Carson will contribute $10,000 cash and inventory worth $40,000 (adjusted basis of $30,000). What are Carson and Dan's bases in ProClothing if the business is organized as a
a.Partnership
b.Corporation