1. On June 1 of the current year, Kelly received a 10% interest in Rock Co., a partnership, for services contributed to the partnership. Rocks net assets at that date had a basis of $70,000 and a fair market value of $100,000. In Kellys current-year income tax return, what amount must Kelly include as income from the transfer of the partnership interest? Explain your answer with code section. 2. Mr. McRich is a limited partner with a 60% loss interest and a 30% profit interest in the XYZ Partnership. Mr. McRich contributed $10,000 cash for his partnership interest. At the time of his contribution, the partnership had recourse liabilities of $100,000 and nonrecourse liabilities of $70,000. There is no minimum gain related to the nonrecourse debt. For the recourse debt, economic risk of loss is shared by the partners based on each partners loss interest. Mr. McRichs basis in his partnership interest is ...???? 3. Mr. D and Mr. E formed a calendar-year partnership. Mr. D contributed land that had a basis to him of $5,000 and a fair market value of $10,000. The land was contributed subject to a mortgage of $3,000. Mr. E is to manage the partnerships business for which he will receive a one-half interest in the profits, losses, and capital of the partnership. Neither of the partners nor the partnership is required to recognize gain or loss on the formation of the partnership. True or False and explain your answer with code section!! 4. A contribution of property by Partner N to her partnership may be treated as a transaction in which gain or loss is recognized if, after a short period of time, either before or after the contribution, the partnership distributes other property to N and the property contributed by N is retained by the partnership. True or False and explain your answer with code