Current Distribution of Contributed Property. Andrew contributed investment land having an $18,000 basis and a $22,000 FMV along with $4,000 in money to the ABC Partnership when it was formed. Two years later, the partnership distributed the investment land Andrew had contributed to Bob, another partner. At the time of the distribution, the land had a $21,000 FMV, and Andrew and Bob's bases in their partnership interests were $21,000 FMV, and $30,000, respectively. a.) What gain or loss must be recognized on the distribution, and who must recognize it? b.) What are the bases for Andrew and Bob's interests in the partnership after the distribution? c.)What is Bob's basis in the distributed land?
Current Distribution of Contributed Property. Andrew contributed investment land having an $18,000 basis and a $22,000 FMV along with $4,000 in money to the ABC Partnership when it was formed. Two years later, the partnership distributed the investment land Andrew had contributed to Bob, another partner. At the time of the distribution, the land had a $21,000 FMV, and Andrew and Bob's bases in their partnership interests were $21,000 FMV, and $30,000, respectively. a.) What gain or loss must be recognized on the distribution, and who must recognize it? b.) What are the bases for Andrew and Bob's interests in the partnership after the distribution? c.)What is Bob's basis in the distributed land?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Current Distribution of Contributed Property.
Andrew contributed investment land having an
$18,000 basis and a $22,000 FMV along with
$4,000 in money to the ABC Partnership when it
was formed. Two years later, the partnership
distributed the investment land Andrew had
contributed to Bob, another partner. At the time
of the distribution, the land had a $21,000 FMV,
and Andrew and Bob's bases in their partnership
interests were $21,000 FMV, and $30,000,
respectively.
a.) What gain or loss must be recognized on the
distribution, and who must recognize it?
b.) What are the bases for Andrew and Bob's
interests in the partnership after the
distribution?
c.)What is Bob's basis in the distributed land?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7f208d33-833d-4e26-a968-105dcc276b2a%2F73e5c79f-3ef7-4934-a98c-bfaa1a625b4b%2Fjdghtus_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Current Distribution of Contributed Property.
Andrew contributed investment land having an
$18,000 basis and a $22,000 FMV along with
$4,000 in money to the ABC Partnership when it
was formed. Two years later, the partnership
distributed the investment land Andrew had
contributed to Bob, another partner. At the time
of the distribution, the land had a $21,000 FMV,
and Andrew and Bob's bases in their partnership
interests were $21,000 FMV, and $30,000,
respectively.
a.) What gain or loss must be recognized on the
distribution, and who must recognize it?
b.) What are the bases for Andrew and Bob's
interests in the partnership after the
distribution?
c.)What is Bob's basis in the distributed land?
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