Randy and Sherry form a general partnership-The Manhattan Partnership-as equal partners. Randy contributes an office building with a $117,000 FMV and a $85,500 adjusted basis to the partnership, along with a $54,000 mortgage which the partnership assumes. Sherry contributes the land on which the building sits with a $45,000 FMV and a $67,500 adjusted basis. Sherry will manage the partnership for the first 5 years of operations but will not receive a guaranteed payment for her work in the first  year of partnership operations. Starting with the second year of partnership operations, Sherry will receive a $10,000 guaranteed payment for each year she manages the partnership. What tax issues should Randy,

Sherry, and the Randy consider with respect to the formation and operation of the partnership?