held the land as an investment for two years. Formation of a Partnership. On January 1, Julie, Kay, and Susan form a partnership. The contributions of the three individuals are listed below. Julie received a 30% partnership interest, Kay received a 60% partnership interest, and Susan received a 10% partnership interest. They share the economic risk of loss from recourse liabilities according to their partnership interests Kay has claimed $15,000 of straight-line MACRS depreciation on the building. The land and building are subject to a $54,000 mortgage, of which $18,000 is allocable to the land and $36,000 is allocable to the building. The partnership assumes the mortgage. Susan is an attorney, and the services she contributes are the drawing-up of all partnership agreements. What amount and character of gain, loss, or income must each partner recognize on the formation of the partnership? What is each partner's basis in her partnership interest? What is the partnership's basis in each of its assets? What is the partnership's initial book value of each asset