Hungry Hens Partnership was formed in 2018 to operate a caf. Henry will not be involved in the day-to-day operations of the restaurant. He is simply an investor. Henrietta will run the restaurant and handle all of the dayto-day administrative business of the partnership. The partnership agreement dictates that all "Grounds maintenance expense" be allocated to Henry and the agreement requires the maintenance of capital accounts, requires liquidating distributions be in accordance with positive capital account balances and contains an unconditional obligation to restore a deficit in a capital account balance. On 1/1/2018, Henry and Henrietta contributed the following property: During 2019, Hungry Hens took out a recourse loan for $50,000 to purchase a new walk-in cooler. Payments made on all loans and cash distributions to each partner are as follows: On 1/1/21, Hungry Hens decided to purchase new equipment and made distributions of the following items to Henry and Henrietta: Below you will find a P\&L - Tax basis for Hungry Hens for the 2018, 2019 and 2020 tax years. Answer the following. Show all of your work for partial credit. You may submit an Excel file but make sure to clearly label your final answer to each of the following: 1. What is Henry and Henrietta's basis in their partnership interest on 12/31/2020 ? 2. What is Henry and Henrietta's capital account on 12/31/2020 ? 3. Are any of the distributions of cash or other property taxable to Henry or Henrietta? 4. What is the basis in the properties received on 1/1/21 and the basis in Henry and Henrietta's partnership interest after the 1/1/21 distribution? 5. What issue develops as a result of the 1/1/21 distribution and what needs to be done to remedy the situation