Partners X and Y form an equal 50/50 partnership. Partner X contributes property having a fair market value of $40,000 and a basis of $20,000 to the partnership. Partner Y contributes $40,000 in cash. The property contributed by X is depreciated over 5 years using the straight-line method for tax purposes. How much depreciation is allocated to each partner per year for both book and tax purposes if the partnership uses the traditional method of allocation?

A) Partner X is allocated $4,000 of depreciation per year for book purposes and $0 depreciation per year for tax purposes. Partner Y is allocated $4,000 of depreciation per year for both book and tax purposes.

B) Both partners are allocated $4,000 in depreciation per year for both book and tax purposes.

C) Both partners are allocated $2,000 of depreciation per year for tax purposes because it is an equal 50/50 partnership. Book depreciation cannot exceed tax depreciation for purposes of maintaining partners capital accounts, so both partners are also allocated $2,000 of depreciation per year for book purposes.

D) Both partners are allocated $4,000 in depreciation per year for book purposes and $2,000 of depreciation per year for tax purposes.