A, B and C each contribute $20,000 to form the ABC general partnership.The partnership agreement satisfies the primary test for economic effect under Section 704(b).Partnership profits and losses are allocated 40% to A, 40% to B and 20% to C.The partnership uses its $60,000 cash, borrows an additional $40,000 on a recourse basis and purchases land for $100,000.

1.How will the $40,000 liability be allocated and what will be each partner's outside basis?

2.What result in 1 above, if A, B and C had contributed $10,000, $20,000 and $30,000 respectively, to the ABC partnership?

3.What result in 1 above, if A and B are limited partners who are not obligated to restore a capital account deficit but the partnership agreement includes a qualified income offset provision?

4.What result in 3 above, if A contributes $15,000 of stock to the partnership as security for the liability and all income, gain or loss on the stock is allocated to A?

5.What result in 3 above, if A contributes his $15,000 note as security for the liability?

6.What result in 3 above, if A personally guarantees the $40,000?