On January 1, Julie, Kay, and Susan form a partnership. The contributions of the three individuals are listed below. Julie recveived a 30% partnership interest, Kay received a 60% partnership interest, and Susan received a 10% partnership interest. They share the economi risk of loss from recourse liabilities according to their partnership interests.

Individual Asset Basis to Partner FMV

Julie Accounts Receivable 0 $60,000

Kay Land $30,000 $58,000

Building $45,000 $116,000

Susan Service ? $20,000

Kay has claimed $15,000 of straight-line MACRS depreciation on the building. The land and building are subject to a $54,000 mortgage, of which $18,000 is allocable to the land and $36,000 is allocable to the building. The partnership assumes the mortgage. Susan is an attorney and all the services she contributes are the drawing up of all partnership agreements.

To raise some immediate cash after the formation, the partnership decides to sell the land and building to a third party and lease it back. the buyer pays 40,000 cash for the land and 80,000 cash for the building in addition to assuming the 54,000mortgage. assume the partnership claimed no additional depreciation on the building before the sale. What is each partners distributive share of the gains and what is the character of the gains