An Equal Partnership Is Formed by Romero and Geraldo

An equal partnership is formed by Romero and Geraldo.Romero contributes cash of $20,000 and a building with a fair market value of $135,000,adjusted basis of $65,000,and subject to a liability of $80,000.Geraldo contributes cash of $75,000.What amount of gain must Romero recognize as a result of this transaction and what is Romero's basis in his partnership interest immediately after formation of the partnership?

A) $5,000 and $85,000
B) $5,000 and $45,000
C) $0 and $45,000
D) $0 and $85,000
E) $85,000 and $42,500