1. Please write the name of each person working on this submission: 2. G and L organize the GL partnership. Each contributes $50 for his partnership interest. The partnership purchases an apartment building for $1,000, making a $100 down payment and paying the remainder of the price with a mortgage loan. The principal of the mortgage loan is payable in a single payment after 12 years. The gross income and deductions of the partnership for each of the first few years are expected to be as follows: Income (rent) $240 Expenses Cash operating exp $150 Interest exp 90 Depreciation 50 Total expenses -290 Net income (loss) ($50) The partnership agreement allocates all depreciation deductions to L. All other gross income and deductions are allocated to the partners equally. The partnership agreement provides that all income, gains, losses and deductions will be reflected in the partners' capital accounts (which will be maintained in accordance with Reg. 1.704-1(b)(2)(iv)); and each partner will be entitled on liquidation (of either the partnership or the partner's interest) to distribution of an amount equal to his positive capital account balance. Assume that the partnership operates for two years, and then sells the building at the beginning of year 3 for, alternatively, $1,100 or $800. How will the partnership's income, gain, loss and deduction (including depreciation deductions) be allocated between G and L, and will the allocations be respected for federal income tax purposes, in the following alternative variations?

(a) The partnership is a general partnership, the mortgage lender has full recourse against the partnership and the partners, and any partner having a deficit in his capital account when either the partnership or his interest is liquidated must then make an additional capital contribution equal to that deficit.