Question: Gail and Harvey formed the GH Partnership (a general partnership). Gail contributed $400,000 of cash and has a one-third interest in profits and loss. Harvey contributed Greenacre, which had a fair market value of $2,000,000 and was subject to a $1,200,000 recourse mortgage. Harvey's basis in Greenacre was $500,000. Harvey has a two-thirds interest in profits and loss. Harvey incurred the debt secured by the mortgage last year and used the proceeds to purchase publicly traded securities. What are the tax consequences of the transfer of Greenacre to the partnership?