Partnership KBCD owns a building with a tax basis of $1,250,000 and a book value of $1,800,000. The building (which was contributed to the partnership by a partner) is encumbered by a nonrecourse mortgage of $2,000,000. The property was recently appraised at $2,500,000.

What is the Code Sec. 704(b) minimum gain (if any) with respect to this property?

What is the Code Sec. 704(c) minimum gain (if any) with respect to this property?