Question: Kay and Sam form an equal partnership. Sam contributes cash of $10,000; Kay contributes Land with a $6,000 basis and a $10,000 fair market value.

Kay and Sam form an equal partnership. Sam contributes cash of $10,000; Kay contributes Land with a $6,000 basis and a $10,000 fair market value. Two years later the land is sold for $12,000. How is the gain allocated to the partners?

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