Jen transfers land with a basis of $250 and a fair market value of $750 to the XJ partnership for a 75% interest. Xavier receives the other 25% interest in exchange for future services. After the formation of XJ Jens capital account is $700 and Xaviers initial capital account is zero. Jens share of all future gains and losses is 75% and Xaviers is 25%.

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

What is Xaviers outside adjusted basis in the partnership?