Liz and John formed the equal LJ Partnership on January 1 of the current year. Liz contributed $80,000 of cash and land with a fair market value of 90,000 and an adjusted basis of 75,000. John contributed equipment with a fair market value of 170,000 and an adjusted basis of 20,000. John had used the equipment in his sole proprietorship.

A. How much gain or loss will Liz, John and the partnership realized?

b. How much gain or loss will Liz, John and the partnership recognize?

C. What tax bases will Liz and John take in their partnership interests?

D. What 704(b) book basis will Liz and John take in their partnership interests?

E. What bases will LJ take in the assets it receives?

F. Are there any differences between inside and outside basis? Explain.\

G. How will the partnership depreciate any assets it receives from the partners?

H. Do additional considerations arise because of the difference between the basis and fair market values of the property John contributed? Explain.