Question: A and B form the equal AB partnership. A contributes cash of $20,000. B contributes land with a basis of $9,000 and a fair market

A and B form the equal AB partnership. A contributes cash of $20,000. B contributes land with a basis of $9,000 and a fair market value of $20,000. The land is a capital asset to B and has been held for over one year.

Describe the tax consequences under each of the three I.R.C section 704(c) allocation methods if the partnership sells the land for either $21,000 or $19,000, assuming the partnership has adequate other income and deductions, if necessary.

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