Martin and Tom each have accounting practices and have decided to join forces by forming the M&T partnership on 1/1/X They will use the goodwill method. Under the terms of the partnership contract, Martin will contribute land and a building having a 500,000 FV while Tom contributes an extensive client list and 300,000 in cash. Martin and tom will be equal partners. Tom will receive a capital credit for which of the following amounts?

1. 400,000
2. 500,000
3. Impossible to determine
4. None of the above