7.8 A and B want C to manage investment properties for them. Together, they form Partnership ABC LP, a limited partnership in which A and B are limited partners and C is the general partner. A contributes Property X, with a value of $50,000 and adjusted basis of $18,000, subject to a $32,000 nonrecourse mortgage. B contributes Property Y, with a basis and value of $60,000, subject to a recourse debt of $42,000. Partnership ABC LP assumes this recourse debt and the lender releases B. In exchange for her agreement to perform services for Partnership ABC LP, C receives a one-third interest in Partnership ABC LP, the value of which is currently deductible by the partnership. The partnership agreement meets the standards of the alternate test for economic effect and provides that all items of partnership income, gain, loss and deduction, and all excess nonrecourse liabilities, will be allocated equally among the partners. It adopts the traditional method under section 704(c). Assuming no disguised sale, what is the basis of each partner in her interest in Partnership ABC immediately following these formation transactions? State law imposes an unlimited deficit-restoration obligation on C, the general partner, which is respected for all purposes of section 704(b).

a) A, $0; B, $18,000; C, $60,000

b) A, $4,000; B, $36,000; C, $36,000

c) A, $6,000; B, $24,000; C, $48,000

d) A, $24,000; B, $42,000; C, $12,000