Formation of a Partnership Compared to Formation of a Corporation. At the beginning of the current year, Able and Baker formed the AB Partnership by transferring cash arn propertyto the partnership in exchange for a partnership interest, with eachhaving a 50% interest. Specifically, Able transferred property having a $59,000 EMV,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 partnership's and each partner's gain or loss recognized on the formation of , the partnership? b. What is each partner's 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 d. Assume instead that Able and Baker formed a corporation rather than a partnership. year What is the corporation's and each shareholder's gain or loss recognized on the forma tion of the corporation? What is each shareholder's basis in his or her stock at the encd of the current year