3. The AB an CD partnerships merged on September 30. What are the tax consequences under the following alternative circumstances?

1. After the merger, each partner owns a 25 percent capital and profits interest.
2. After the merger, A and B each owns a 15 percent capital and profits interest and C and D each owns a 35 percent interest.

4. A, B and C are equal partners in the ABC partnership. The partnership had elected 754, which it belatedly realized was a mistake. On January 1, the partnership decided to split the organization into the AB and BC partnerships which are equal as to profits, losses and capital. What are the tax consequences of the division?