Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000.

If an amount is zero, enter "0".

a. How much gain, if any, must Emma and Laine recognize on the contributions?

Emma recognizes a gain of $_________ on the transfer and Laine recognizes a gain of $____________.

b. Emma's tax basis in her partnership interest is $___________. Her 704(b) book basis is $____________.

c. Laine's tax basis in her partnership interest is $_____________. Her 704(b) book basis is $______________.

d. The partnership will take a $___________ carryover basis in the assets it receives.

e. How will the partnership account for the difference between the basis and value of the property transferred by Laine?

The partnership will treat the $____________ difference between the basis and fair market value of the property Laine contributed as a precontribution gain that must be allocated to Laine when the property is sold or as described under the Regulations if the property is depreciable.