Laura and Marty form a 50/50 partnership (LM Partners) in 2018. Laura contributes land with a fair market value of $800,000 and an adjusted basis of $500,000. The land is subject to a $250,000 mortgage which the partnership assumes. Marty contributes $550,000 of cash.

1. Determine Lauras outside basis and Martys outside basis after each of them has contributed their property and cash to form the partnership.

2. In 2020, the partnership sells the land (originally contributed by Laura) for $875,000. How much gain will Laura report on her 2020 1040 return?

3. How much gain will Marty report on his 2020 1040 return?