On January 17, 2011, Brandon contributed $100,000 cash to the Brandon-Landon partnership for a one-half interest in capital and profits. Landon contributed property with a basis to him of $100,000 and a fair market value of $200,000. On March 13, 2011, the partnership transferred $100,000 of cash to Landon. Five days later the partnership borrowed $160,000 from the bank to finance the partnerships activities. The note was secured by the property that Landon contributed, although the bank agreed to look only to the property for collateral and that if the partnership defaulted, the bank would only seek recovery through sales proceeds from selling the property. Brandon and Landon did not have any personal liability on the loan.

• Describe all of the tax consequences to Brandon and Landon and the partnership of the transactions described above.
• Would the consequences be any different if the $100,000 cash is distributed on March 13, 2013 instead of in 2011?