Assume Anita & Bob are equal 50% partners in the AB Partnership. Anita has a $100,000 tax basis in her partnership interest & Bob has a $100,000 tax basis in his partnership interest. The AB Partnership owns one asset - land - with a tax basis of $150,000 & a fair market value of $1,000,000. The AB Partnership has no liabilities. Anita & Bob want to convert the AB Partnership to a C corporation (AB Corporation), & would like you to asvise them regarding which of the 3 forms they should choose to effectuate the conversion.

1. If Anita & Bob choose the "assets over" form to effectuate the conversion, will Anita, Bob, the AB Partnership or AB Corporation recognize any gain or loss in connection with the conversion? If so, please indicate how much gain or loss & which party or parties (Anita, Bob, the AB Partnership, AB Coporation) would recognize the gain or loss.

2. If Anita & Bob choose the "assets up" form to effectuate the conversion, will Anita, Bob, the AB Partnership or AB Corporation recognize any gain or loss in connection with the conversion? If so, please indicate how much gain or loss & which party or parties (Anita, Bob, the AB Partnership, AB Coporation) would recognize the gain or loss.

3. If Anita & Bob choose the "interest over" form to effectuate the conversion, will Anita, Bob, the AB Partnership or AB Corporation recognize any gain or loss in connection with the conversion? If so, please indicate how much gain or loss & which party or parties (Anita, Bob, the AB Partnership, AB Coporation) would recognize the gain or loss.

4. If Anita & Bob choose the "assets over form to effectuate the conversion.

a. What tax basis will AB Corporation have in the land?

b. What tax basis will Anita have in her AB Corporation stock?

c. What tax basis will Bob have in his AB Corporation stock?

5. If Anita & Bob choose the "assets up form to effectuate the conversion.

a. What tax basis will AB Corporation have in the land?

b. What tax basis will Anita have in her AB Corporation stock?

c. What tax basis will Bob have in his AB Corporation stock?

6. If Anita & Bob choose the "interest over form to effectuate the conversion.

a. What tax basis will AB Corporation have in the land?

b. What tax basis will Anita have in her AB Corporation stock?

c. What tax basis will Bob have in his AB Corporation stock?

7. What is your advice to Anita & Bob regarding which of the 3 forms to use to effectuate the conversion?