1. Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In the next tax year, when the propertys fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner. Jarviss basis in the partnership interest was $100,000 immediately before the distribution.

   Which partner must recognize a gain, what is the amount recognized, and what is the effect on that partners basis in the partnership interest? What is the effect on Jarviss basis in the nondepreciable property received?