Gabby transfers land with a basis of $250 and a fair market value of $750 to the JP partnership for a &5% interest. Jakub receives the other 25% interest in exchange for future services. After the formation of JP Gabby's capital account is $700 and Jakubs initial capital account is zero. Gabbys share of all future gains and losses is 75% and Jakubs is 25%.

A: Does Jakub recognize any gain or income on receipt of his partnership interest? Why or why not?

B: What is Jakubs outside adjusted basis in the partnership?