Which of the following reflects Xena's basis in the partnership interest after contributing assets?

To determine Xena's basis in her partnership interest after contributing assets, you typically start with the amount of cash she contributes, add the adjusted basis of any property contributed, and consider any debt that the partnership assumes or has related to her contribution.

In the case of Xena, if the correct answer is indicated as $90,000, it suggests that her contributions—whether they involve cash or property—resulted in a total basis amounting to that figure. For instance, if Xena contributed cash of $45,000 and property with an adjusted basis of $45,000, her total basis would be $90,000.

This total does not consider any liabilities unless they specifically alter her overall investment in the partnership. If Xena's contribution consisted of appreciating assets or if she retained liability that increased her basis, those factors would typically affirm the $90,000 figure as her new basis.

Understanding the calculation factors—contributions and any retained liabilities—clarifies how the basis is determined and reinforces how regulations govern partnership interests and their tax implications.