A and B form partnership AB, with Partner A contributing property with a fair market value of $100,000 and adjusted tax basis of $40,000.Partner A's property is a 10 year depreciable life asset with four years of remaining tax life.The property is depreciated using the straight-line method.Partner B contributes land with a fair market value of $100,000 and tax basis of $100,000.In addition to the depreciation deduction from Partner A's contributed property, assume for the next 10 years the partnership has $25,000 of income and $25,000 of other deductible expenses.

How much taxable income (or loss) will each partner recognize each year during the next 10 years under the following methods?

a.Traditional method

b.Remedial method