Maria, a 25 percent partner in MARS Partnership, needs a distribution from the partnership for some unexpected bills The partnership, however, does not have any extra cash to distribute It will distribute land to Maria that has a value of $27,000 and a basis to the partnership of $50,000 Maria 's b...

a There is no gain or loss recognized on the distribution of the land to Maria Maria will take a 500 ...

Maria, a 25 percent partner in MARS Partnership, needs a distribution from the partnership for some unexpected

Question:

Maria, a 25 percent partner in MARS needs a from the for some unexpected bills. The however, does not have any extra cash to distribute. It will distribute land to Maria that has a value of $27,000 and a basis to the of $50,000. Maria's basis in her interest is $55,000.
a. How will this be treated for tax purposes?
b. Assume alternatively, that the sells the land for its fair market value and distributes the cash to Maria. What are the tax consequences of the sale and Which alternative would you recommend to Maria? Explain.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...