In January 2015, Joey contributed investment land he had held two years with a FMV of $6,000 and an adjusted basis of $10,000, and Rachel contributed $6,000 cash to form the Green Partnership as equal general partners. During 2015, the partnership earned ordinary income of $10,000 and made no distributions. On January 1, 2016, while the partnership still held the land, Joey sold his interest in the partnership to Phoebe for $11,000. In April 2016, Green partnership sold for $5,400 the land that Joey contributed. What are the tax consequences of these transactions?
A partial list of research resources includes:
• Sec. 721
• Sec. 704(c)
• Sec. 705
• Sec. 741
• Reg. Sec. 1.704-1(c)