Internal Revenue Code §722 establishes a partner's basis from contributions, excluding services which are not 'property' under §721. F contributes services valued at $30,000, credited to capital but not increasing outside basis, as services trigger income recognition under §83 but basis remains zero per §722. The $30,000 affects capital but not basis, aligning with the distinction between book capital and tax basis. Choices B, C, and D are incorrect as they involve property basis or liabilities, which do not apply to services. Specifically, choice C relates to E's cash, not F's basis. Professionals must differentiate capital account credits from tax basis adjustments, especially for non-property contributions. A key rule is that basis from services is zero unless cash or property is also contributed, with value taxed as income.

A partner's basis is increased by their share of both taxable and tax-exempt income and decreased by distributions. Kim's share of ordinary income is \(50% * $80,000 = $40,000\). Her share of tax-exempt income is \(50% * $10,000 = $5,000\). Her ending basis is calculated as: Beginning basis ($60,000) + Share of ordinary income ($40,000) + Share of tax-exempt income ($5,000) - Cash distribution ($30,000) = \($75,000\).

When a partnership interest is received for services, the fair market value of the interest is treated as compensation and is recognized as ordinary income by the partner. Therefore, Sara must recognize $40,000 of income. Her initial basis is the amount of income she recognizes ($40,000) plus her share of partnership liabilities ($15,000). Thus, her initial basis is \($40,000 + $15,000 = $55,000\).

An increase in a partner's share of partnership liabilities is treated as a cash contribution, which increases the partner's basis. The total increase in nonrecourse liabilities is \($150,000 - $90,000 = $60,000\). Ann's share of this increase is \(1/3 * $60,000 = $20,000\). Her adjusted basis is her basis before the change ($50,000) plus her share of the liability increase ($20,000), for a total of \($70,000\).

A partner's basis is first increased by income items and then decreased by losses. Marta's basis is first increased by her share of portfolio income: \($35,000 + (50% * $10,000) = $40,000\). Her share of the ordinary loss is \(50% * $90,000 = $45,000\). However, a partner can only deduct losses up to their basis. Therefore, Marta can deduct only $40,000 of the loss. Her basis is reduced to zero. The remaining $5,000 loss is suspended and can be carried forward indefinitely.

In a non-liquidating distribution of property, the partner's basis in the distributed property is the same as the partnership's basis (a carryover basis), but it cannot exceed the partner's basis in the partnership interest. Here, the partnership's basis in the land ($80,000) is greater than Paul's outside basis ($70,000). Therefore, Paul's basis in the land is limited to $70,000. His basis in the partnership interest is reduced by the basis he takes in the land, so \($70,000 - $70,000 = $0\).

A partner's basis is adjusted for their share of income and changes in liabilities. The decrease in partnership liabilities is treated as a cash distribution. Dale's share of the liability decrease is \(25% * $40,000 = $10,000\). His share of the ordinary income is \(25% * $80,000 = $20,000\). His ending basis is: Beginning basis ($40,000) + Share of income ($20,000) - Deemed distribution from liability decrease ($10,000) = \($50,000\).

A partner's initial tax basis in a partnership interest received for a property contribution is the adjusted basis of the property contributed. Therefore, Ethan's tax basis is $30,000. A partner's book capital account under Section 704(b) is generally credited with the fair market value of the property contributed. Therefore, Ethan's book capital account is $50,000. This creates a book-tax difference.

A partner's basis is decreased by their distributive share of partnership losses and non-deductible expenses that are not capital expenditures. Charitable contributions are separately stated items that are non-deductible at the partnership level but flow through to the partners, decreasing their basis. Tax-exempt income and Section 1231 gains increase basis. Guaranteeing debt can increase a partner's share of recourse liabilities, which increases basis.

A limited partner generally does not have an economic risk of loss for recourse liabilities, so they are not allocated any basis from them (unless they guarantee the debt). Nonrecourse liabilities are allocated to all partners, typically based on their profit-sharing ratio. Yasmine's basis is her initial basis ($50,000) plus her share of nonrecourse liabilities \(50% * $100,000 = $50,000\). Her total basis is \($50,000 + $50,000 = $100,000\).