Moe, Johnny, and Raymond form a partnership and contribute the following assets:

	FMV			Basis			Partnership %
Moes inventory	$	65,800		$	14,000		33.3%
Johnnys building	$	171,120		$	110,400		33.3%
Raymonds cash	$	42,000		$	42,000		33.3%

Johnnys building has a mortgage of $82,800, which the partnership assumes.

1. What amount of gain, if any, do each of the partners recognize?
2. What is the basis for each partner in his partnership interest?

   Partner	a. Gain	b. Ending Basis
   Moe	$0
   Johnny	$0
   Raymond	$0

3. What is the basis to the partnership in each asset?

   Asset	Basis
   Cash
   Inventory
   Building

4. Would Johnny report any gain if the basis in the building were $57,400?

   Gain