Carrie DLake, Reed A. Green, and Doug A. Divot share a passion for golf and decide to go into the golf club manufacturing business together. On January 2, 2019, DLake, Green, and Divot form the Slicenhook Partnership, a general partnership. Slicenhooks main product will be a perimeter-weighted titanium driver with a patented graphite shaft. All three partners plan to actively participate in the business. The partners contribute the following property to form Slicenhook:

Partner	Contribution
Carrie DLake	Land, FMV	$	460,000
	Basis $460,000, Mortgage	$	60,000
Reed A. Green	Cash	$	400,000
Doug A. Divot	Cash	$	400,000

Carrie had recently acquired the land with the idea that she would contribute it to the newly formed partnership. The partners agree to share in profits and losses equally. Slicenhook elects a calendar year-end and the accrual method of accounting. In addition, Slicenhook received a $1,500,000 recourse loan from Big Bank at the time the contributions were made. Slicenhook uses the proceeds from the loan and the cash contributions to build a state-of-the-art manufacturing facility ($1,200,000), purchase equipment ($600,000), and produce inventory ($400,000). With the remaining cash, Slicenhook invests $45,000 in the stock of a privately owned graphite research company and retains $55,000 as working cash. Slicenhook operates on a just-in-time inventory system so it sells all inventory and collects all sales immediately. That means that at the end of the year, Slicenhook does not carry any inventory or accounts receivable balances. During 2019, Slicenhook has the following operating results:

Sales				$	1,126,000
Cost of goods sold					400,000
Interest income from tax-exempt bonds					900
Qualified dividend income from stock					1,500
Operating expenses					126,000
Depreciation (tax)
179 on equipment	$	39,000
Equipment		81,000
Building		24,000			144,000
Interest expense on debt					120,000

The partnership is very successful in its first year. The success allows Slicenhook to use excess cash from operations to purchase $15,000 of tax-exempt bonds (you can see the interest income already reflected in the operating results). The partnership also makes a principal payment on its loan from Big Bank in the amount of $300,000 and a distribution of $100,000 to each of the partners on December 31, 2019. The partnership continues its success in 2020 with the following operating results:

Sales			$	1,200,000
Cost of goods sold				420,000
Interest income from tax-exempt bonds				900
Qualified dividend income from stock				1,500
Operating expenses				132,000
Depreciation (tax)
Equipment	$147,000
Building	30,000			177,000
Interest expense on debt				96,000

The operating expenses include a $1,800 trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $6,000. By the end of 2020, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reeds interest in Slicenhook for $730,000 in cash and the assumption of Reeds share of Slicenhooks debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reeds interest on January 1, 2021. As of January 1, 2021, Slicenhook has the following assets:

		Tax Basis			FMV
Cash	$	876,800		$	876,800
Investmenttax exempts		15,000			18,000
Investment stock		45,000			45,000
Equipmentnet of dep.		333,000			600,000
Buildingnet of dep.		1,146,000			1,440,000
Land		460,000			510,000
Total	$	2,875,800		$	3,489,800

Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest:

	Tax Basis			FMV
Cash	$	485,000		$	485,000
Investment stock		45,000			45,000
Equipment$200,000 cost, net of dep.		111,000			200,000
Total	$	641,000		$	730,000

Slicenhook has not purchased or sold any equipment since its original purchase just after formation.

a. Determine each partners recognized gain or loss upon formation of Slicenhook. (Leave no answer blank. Enter zero if applicable.)