Problem I (8 Points) Steve Rogers and Tony Stark formed a general partnership. Steve contributed $100,000 and Tony contributed land with a basis of $70,000 and a fair market value of $120,000 subject to a $20,000 recourse liability. The partnership agreement provides that all income and gain are allocated 50/50 but losses and deductions are to be allocated 20 percent to Steve and 80 percent to Tony and that upon liquidation, all partners must restore a negative capital account. Six months later, the partnership purchased a building for $500,000 and financed the entire purchase price with a $500,000 recourse liability.

A. How should the $20,000 liability be allocated between Steve and Tony immediately after the contribution?

B. What is Steve and Tony's basis in their partnership interest immediately after the contribution?

C. What is Steve and Tony's book capital account immediately after the contribution?

D. How should the $520,000 in total liabilities be allocated between Steve and Tony after the purchase? E. What is Steve and Tony's basis in their partnership interest after the purchase?

F. What is Steve and Tony's book capital account after the purchase?