Zach contributed land with an FMV of $44,000 and a basis of $23,500 to a partnership on April 5, 2014. On June 6, 2020, the partnership distributed the land to Art, a partner in the same partnership. At distribution, the land had an FMV of $48,950. Assume that both are equal partners in the partnership. Required: a. What is the effect of the distribution to Zach, if any? b. What is the effect of the distribution to Art? а. b.

Zach contributed land with an FMV of $44,000 and a basis of $23,500 to a partnership on April 5, 2014. On June 6, 2020, the partnership distributed the land to Art, a partner in the same partnership. At distribution, the land had an FMV of $48,950. Assume that both are equal partners in the partnership. Required: a. What is the effect of the distribution to Zach, if any? b. What is the effect of the distribution to Art? а. b.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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