John and Yi formed the X partnership on June 16, 20X6. They agreed to split profits and losses equally. John contributed $20,000 cash and Yi contributed a machine with a basis of $5,000 (fmv $50,000) subject to a mortgage of $30,000 on June 17, 20X6. Yi's holding period for the machine began on May 2, 20X4.

13. The X partnership's tax basis for the property contributed by Yi is:
a. $50,000
b. $45,000
c. $20,000
d. $5,000
e. None of the above

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