Mary and Carol each contribute $50,000 to their newly formed limited partnership in which Carol is the general partner. The partnership borrows $900,000 on a recourse basis and buys a $1,000,000 building. The building generates $100,000 of depreciation a year for ten years, and the partnership has no other items of income or loss. The partners agree to allocate all losses equally until their capital accounts are zero; after that the partnership specially allocates all losses to Mary. Assume that capital accounts are maintained in accordance with the rules in Regulations $1.704-1(b)(2)(iv); that liquidating distributions are to be made in accordance with positive capital account balances and the general partner will restore any deficit balance in his/her account. Do the allocations have economic effect in years 1, 2 and 3