Three years ago, David contributed land with a basis of $5,000 and a FMV of $9,000 to the DEF partnership. In the current year, the partnership distributed the land to Edward, another partner. At the time of the distribution, the land had a FMV of $12,000.

a)How much gain does David and Edward recognize due to the distribution?

b) What is Edward’s basis in the land?

c) What is the partnership basis in the land immediately before the distribution?

d) How would your answer to a), b) and c) change if David had contribution the land to the partnership 10 years ago?

Answer rating: 100% (QA)

a The total gain of David and Edward out of this distribution is onethird of 7000 12... View the full answer