AC Limited Partnership is a calendar year partnership using the accrual method of accounting. A is the general partner with a 10% interest, and C is the limited partner with a 90% interest. The partnership was formed with cash contributions of $20,000 from A and $180,000 from C. Profits and losses are allocated 10% to A and 90% to C. The partnership agreement provides for proper maintenance of partner capital accounts according to the Section 704(b) regulations, and it provides that liquidating distributions to partners will be in accordance with positive capital balances. A has an unconditional obligation to restore a deficit in her capital account, but C is not obligated to restore a deficit balance. The agreement also contains qualified income offset and minimum gain charge-back provisions. Nonrecourse deductions are allocated the same as profits and losses. The partnership acquires a commercial building in a soft rental market. The buildings cost is $1 million, financed with $200,000 cash and an $800,000 nonrecourse loan. The loan principal is payable in a balloon payment due in ten years. Annual interest payments on the loan are $100,000 per year. Assume the annual interest is paid through unsecured borrowing by the partnership that is guaranteed by A. Depreciation expense is $100,000 annually. To attract a major tenant, the partnership offers a rent-free holiday of three years. Assume there are no other expenses. Consequently, the partnerships annual loss for the first three years is $200,000 per year. a. What is the amount of minimum gain for each of the first three years? b. Allocate the annual loss of $200,000 to each of the partners capital accounts for the first three years. c. At the beginning of year four, the partnership sold the building for $1,100,000 and pays off the debt. Make the proper allocations to the capital accounts for year four. d. How will the cash be distributed upon liquidation?