The abc partnership has a nonrecourse liability that it incurred by borrowing from an unrelated bank. It is secured by an apartment building owned and managed by the partnership. The liability is not convertible into an equity interest. How does this liability affect the at-risk basis of general partner anna and limited partner bob?
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The portion that the owners are at risk for will be treated as recourse debt to the owners who bear economic risk of loss and will be allocated to them. ... Nonrecourse debt is a liability of the partnership where no owner bears the risk of loss. The creditor is the only one at risk of loss.
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