1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal 1/3 interests in the partnerships capital, profits, and losses: A contributes land, a capital asset that A acquired several years ago, worth $100 in which A has a tax basis of $40. B contributes machinery with a basis of $25 and a value of $60, plus $40 in cash. B purchased the machinery several years ago for $75 and has taken $50 of depreciation. C contributes inventory with a value of $100 in which C has a basis of $90. (a) What gain and/or loss will be recognized by the partners and the partnership on formation? (b) What will be the partnerships inside basis and holding period for each of the contributed assets? (c) What will be the partners outside bases and holding period for their partnership interests?