Charley and Caroline form the MMM General Partnership as equal partners. They make the following contributions:

a. Caroline contributes cash with a basis of $50,000 and a FMV of $50,000; she also contributes securities with a basis of $20,000 and a FMV of $25,000

b. Charley contributes land with a basis of $55,000 and a FMV of $65,000; he also contributes a Building with a basis of $70,000 and a FMV of $120,000

The MMM Partnership assumes the $80,000 recourse mortgage on the building that Charley contributes and the partners share the economic risk of loss on the mortgage equally

1. What is the amount and character of gain or loss that each partner will recognize on the formation of the partnership?

2. What is each partners basis in their respective partnership interest?