The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2015, Jessica contributed land valued at $600,000 to the partnership, in exchange for a 50% interest in JM. She had purchased the land in 2007 for $420,000 and held it for investment purposes (capital asset). The partnership holds the land as inventory.

On the same date, Matt contributed land valued at $600,000 that he had purchased in 2005 for $720,000. He became a 50% owner. Matt is a real estate developer, but this land was held personally for investment purposes. The partnership holds this land as inventory.

In 2016, the partnership sells the land contributed by Jessica for $620,000. In 2017, the partnership sells the real estate contributed by Matt for $580,000.

a. What is each partner's initial basis in his or her partnership interest?

b. What is the amount of gain or loss recognized on the sale of the land contributed by Jessica? What is the character of this gain or loss?

c. What is the amount of gain or loss recognized on the sale of the land contributed by Matt? What is the character of this gain or loss?

d. How would your answer in (c) change if the property was sold in 2022?