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

	FMV	Basis	Partnership Percentage
Moes inventory	$ 50,000	$10,000	33.3%
Johnnys building	110,000	80,000	33.3
Raymonds cash	50,000	50,000	33.3

Johnnys building has a mortgage of $60,000, which the partnership assumes.

1. Do any of the partners recognize any gain? If so, how much and why?

2. What is the basis for each partner in his partnership interest?

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

4. How would your answer change with respect to Johnny if the basis in the building were $45,000?