Question: In Year 1 , Patty contributed land with a $ 4 , 0 0 0 basis and a $ 1 0 , 0 0 0

In Year 1, Patty contributed land with a $4,000 basis and a $10,000 FMV in exchange for a 40% profits, loss, and capital interest in the PD Partnership. Dave contributed land with an $8,000 basis and a $15,000 FMV for the remaining 60% interest in the partnership. During Year 2, PD Partnership reported $8,000 of ordinary income and $10,000 of long-term capital gain from the sale of the land Patty contributed. What are the tax consequences of this transaction?

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