X, Y, and Z form XYZ Partnership by contributing cash and property as follows: X contributes $40,000 cash for a 20 percent interest. Y contributes property valued at $80,000 for a 40 percent interest. This property has a basis in Ys hands of $50,000. For the remaining 40 percent interest, Z develops the partnership agreement and performs other services that are valued at $5,000. In addition, he contributes property with a fair market value of $100,000 with a $25,000 mortgage that the partnership guarantees. The property has a basis of $70,000 in Zs hands. Determine X, Y, and Zs bases in their partnership interests. Determine the partnerships basis in the assets contributed.

a. Xs partnership interest basis: $ ......

b. Ys partnership interest basis: $.....

c. Zs partnership interest basis: $ ....

d. The partnership has a basis of $ ......in the cash, $ .......in the property contributed by Y, and .......$basis in the property contributed by Z. It will either expense or capitalize the $ ......for the services performed.