Liz and John formed the equal LJ Partnership on January 1^st of current year. Liz contributed $80,000 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.

How much gain or loss will Liz, John, and the partnership realize?

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

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

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

What bases will LJ take in the assets it receives?

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