Arnold, Becky & Chris agree to the formation of a general partnership (ABC) in which each will have the same one-third interest in the partnership's capital and profits/losses.

On January 1, 2020, Arnold contributes Property #1, depreciable property with a FMV of $540,000 and an AB of $380,000. At the time of its contribution to the partnership Property #1 had 4 years left on its original recovery period; however, it was anticipated that it remaining economic useful life is 10 years. Becky contributes Property #2, non-depreciable property with a FMV of $540,000 and an AB of $425,000. Chris contributes Land with a FMV of $540,000 and an AB of $625,000.

a) What is the built-in gain or loss attributable to each partner and each asset at the time of the partnership's formation?

b) Assume that the partnership elected the traditional method for Property #1. What would be the partnership's book and tax depreciation for the year 2020, and what is each partner's share of book and tax depreciation for the 2020 year?

c) Assuming the facts set forth above (including those in part (b) relating to depreciation), if the partnership sold Property #1 on January 1, 2021 for $435,000 what is (i) the partnership's book and tax gain or loss as a result of the sale, and (ii) each partner's share of that gain or loss?

d) Ignore parts (b) and (c), above. Assume, instead, that the partnership elected the remedial allocation method for Property #1. What would be the partnership's book and tax depreciation for the five years, 2020 through 2024, and what is each partner's share of the book and tax depreciation for the years 2020 through 2024?