Lee, Brad and Rick form the LBR Partnership on January $1$ of the current year. In return for a $25\%$ interest, Lee transfers investment land $($AB $$15,000,$ FMV $$17,500)$ subject to a nonrecourse liability of $$10,000.$ The liability is assumed by the partnership. Brad transfers inventory $($AB $$16,000,$ FMV $$7,500)$ for a $25\%$ interest, and Rick transfers cash of $$15,000$ for the remaining $50\%$ interest.

A$)$ What are the tax consequences of the formation?