Lemon, Lime, and Orange, three cash method, calendar year individuals, form Starburst

General Partnership to create fruit candies. Before forming this partnership, they each had

their own sole proprietorship. The partners contribute the following property $($in each case

worth $$3,000$ net of liabilities$)$ in exchange for equal $\frac{1}{3}$ interests in the partnership's

capital, profits and losses $($see the table below of property contributed by each partner$).$ The

partnership assumes all liabilities encumbering the contributed assets. Assume that the

partners are responsible for an equal share of the partnership's liabilities. What is the most

that any specific partner recognizes on these transactions?

Lemon contributes land with a fair market value of $$6,450,$ which is encumbered by a

recourse mortgage of $$4,050.$ Lemon has held the land for several years as an

investment, and his basis in the land is $$1,500.$ Lemon also contributes $$600$ in cash.

Lime contributes a building, a $1231$ asset, with a value of $$3,900$ in which Lime has an

adjusted basis of $$1,950.$ The building was purchased several years ago bime and is

subject to a recourse mortgage $$900.$

Orange contributes zero basis accounts receivable from his business worth $$5,250$ and

assigns his accounts payable of $$2,250$ to the partnership.

$$1,500$

$$900$

$$300$

$$0$