In forming Deli Partnership, Adam contributes $10,000 cash. Betty contributes property with a basis of $8,000, fair market value of $10,000, subject to a mortgage liability of $4,000. Charles contributes services of $10,000. Diane contributes equipment with a basis of $6,000, Fair market value $10,000. All are equal partners. 1. How much gain is recognized by Adam? a. $0 b. $500 C. $3,000 d. $6,000 2. How much gain is recognized by Betty? a. $0 b. $2,000 C. $3,000 d. $4,000 3. What is Betty's basis for her partnership interest? a. $1,000 b. $0 C. $3,000 d. $5,000 4. What is the partnership's tax basis for the property contributed by Betty? a. $0 b. $3,000 C. $5,000 d. $8,000 5. What is Adam's basis for his partnership interest? a. $2,000 b. $3,500 c. $10,000 d. $11,000 6. How much gain is recognized by Charles? a. $5,000 capital gain income b. $0 c. $10,000 ordinary income. d. $4,000 ordinary income. 7. What is Diane's basis for her partnership interest? a. $2,000 b. $3,000 c. $6,000 d. $7,000 In forming Deli Partnership, Adam contributes $10,000 cash. Betty contributes property with a basis of $8,000, fair market value of $10,000, subject to a mortgage liability of $4,000. Charles contributes services of $10,000. Diane contributes equipment with a basis of $6,000, Fair market value $10,000. All are equal partners. 1. How much gain is recognized by Adam? a. $0 b. $500 C. $3,000 d. $6,000 2. How much gain is recognized by Betty? a. $0 b. $2,000 C. $3,000 d. $4,000 3. What is Betty's basis for her partnership interest? a. $1,000 b. $0 C. $3,000 d. $5,000 4. What is the partnership's tax basis for the property contributed by Betty? a. $0 b. $3,000 C. $5,000 d. $8,000 5. What is Adam's basis for his partnership interest? a. $2,000 b. $3,500 c. $10,000 d. $11,000 6. How much gain is recognized by Charles? a. $5,000 capital gain income b. $0 c. $10,000 ordinary income. d. $4,000 ordinary income. 7. What is Diane's basis for her partnership interest? a. $2,000 b. $3,000 c. $6,000 d. $7,000