1. (Contribution of Services in exchange for an interest in a partnership) The existing XYZ partnership has the following balance sheet: Assets Real Estate Liabilities Capital X Y Z Tax Basis $120,000 SO $40,000 $40,000 $40,000 $120,000 Fair Market Value $180,000 SO $60,000 $60,000 $60,000 $180,000 If Q joins the partnership and provides $45,000 of services in exchange for a 25% interest in the partnership, what is the tax effect to Q, X, Y, Z, and XYZ? Assume all of the partners are individuals. (a) How much income does Q recognize? (b) How much gain do X, Y, and Z recognize? (c) How much of a deduction do they get? (d) What basis will XYZ have in the Real estate? (e) What is the balance sheet afterward? (f) If the property is later sold for $180,000, how much gain will each partner recognize? (g) What if it is later sold for $200,000?