Assume the same facts as in Problem 36, except that Jerome’s basis in the partnership is $90,000 instead of $50,000.
a. How much gain or loss, if any, must Jerome recognize on the distribution?
b. What basis will Jerome take in the inventory and land?
c. What are the tax consequences to the partnership?
d. Would your answer to (a) or (b) change if this had been a nonliquidating distribution? Explain.