Paul will recognize income of _______________ and will have a basis in his partnership of ______________ and will be allocated a gain of____________ Xavier will be allocated a gain of ______________ and a deduction for ordinary income and necessary business expense of_____________ The partnership basis in the building will be _____________

The ABC partnership has the following balance sheet: Assets Building Liabilities Capital Xavier Yasmin Zara Tax Basis $300,000 SO $100,000 $100,000 $100,000 FMV $600,000 $0 $200,000 $200,000 $200,000 Paul provides services valued at $150,000 in exchange for a 25% interest in the partnership. These services are considered an ordinary and necessary business expense under IRC Sec. 162.