C and D, both individuals, are 60% and 40% partners, respectively, in the CD partnership. C starts the year with an adjusted basis of 600 in his partnership interest, while D has an initial adjusted basis of 400 in her partnership interest.

(a) For the year, the partnership has sales of 300, cost of goods sold of 230, T-bill interest income of 30, a long-term capital gain of 150, charitable contributions of 30 and payroll costs of 60. How do these facts impact the parties for tax purposes?

(b) Same as (a) except that the LTCG of 150 was from stock contributed by C which at the time of contribution had an adjusted basis of 160 and a fair market value of 300.