Pea and Bean are forming the PB Partnership. Pea contributes $600,000 cash and Bean contributes nondepreciable property with an adjusted basis of $400,000 and a fair market value of $600,000. The partnership agreement states that Pea and Bean share in all partnership profits and losses equally.

1) How much gain or loss will Pea, Bean, and the PB Partnership recognize?

2) If PB Partnership sells the property contributed by Bean for $800,000, how is the tax gain allocated between the partners?