7.For purposes of this problem: assume both partners are U.S. citizens: Elton John and Susie

Elton has a building with a basis of $150,000 and a mortgage of $90,000 with a 9% interest rate. Elton has almost unlimited passive income.The net rents before interest expense of the building are $9,000 and the depreciation annually is $5000. Susie has a building with a basis of $175,000 and a mortgage of $160,000 with a 4% interest rate. Her net rents before interest expense of the building are $6,500 and the depreciation annually is $7,000. Susie lives paycheck to paycheck having received no benefit from having her name used in Crocodile Rock.

Elton and Susie believe that each property will be successful over time as the neighborhood in which they are located is growing rapidly.

They are meeting with you tomorrow and you want to have a preliminary partnership agreement strictly in bullet points for them that will cause them to engage you as their accountant. They are unavailable today to ask any questions beyond what is above.

Design a very preliminary partnership agreement proposal based only on these facts and strictly in bullet point form. What are a list of questions that will help you modify your draft partnership agreement as they answer your questions during the meeting?