X and Y agree to form a 50/50 partnership XY. X contributes $1 MM cash and Y contributes land with a FMV of $1 MM and an adjusted basis of $2 MM. The property was acquired many years ago and was not acquired in anticipation of the formation or transfer of the property to the partnership.

On contribution, which of the following results to X?

Select one:

a.

X has a basis in his partnership interest of $1.5 MM.

b.

X's capital account is $1.5 MM.

c.

X's outside basis is $1 MM.

d.

X's capital account is $2 MM.

e.

None of the above.