At the beginning of the current year, Able and Baker formed the AB Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, Able transferred property having a $50,000 FMV, a $30,000 adjusted basis, and subject to a $10,000 liability, which the partnership assumed. Baker contributed $40,000 cash to the partnership. The partnership also borrowed $28,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal eco-nomic risk of loss. During the current year, the partnership earned $24,000 of net ordinary income and reinvested this amount in new property. a. What is the partnerships and each partners gain or loss recognized on the formation of the partnership? b. What is each partners basis in his or her partnership interest at the end of the current year? c. For the partnership, prepare a tax and book balance sheet at the end of the current year. d. Assume instead that Able and Baker formed a corporation rather than a partnership. What is the corporations and each shareholders gain or loss recognized on the forma-tion of the corporation? What is each shareholders basis in his or her stock at the end of the current year?