AB Corporation and YZ Corporation formed a partnership to construct a shopping mall. AB contributed $500,000 cash and YZ contributed land ($500,000 FMV and $430,000 basis) in exchange for a 50 percent interest in ABYZ Partnership. Immediately after its formation, ABYZ borrowed $250,000 from a local bank. The debt is recourse (unsecured by any specific partnership asset). Compute each partner’s initial basis in its partnership interest, assuming that:
a. AB and YX are both general partners.
b. AB is a general partner, and YZ is a limited partner.