An Equal Partnership Is Formed by Rita and Gerry

An equal partnership is formed by Rita and Gerry. Rita contributes cash of $10,000 and a building with a fair market value of $150,000, adjusted basis of $55,000 and subject to a liability of $60,000. Gerry contributes cash of $100,000. What is the partnership's basis in the building contributed by Rita?

A) $55,000
B) $60,000
C) $90,000
D) $150,000
E) None of these

Correct Answer:

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