Mirabelle Contributed Land with a $5,000 Basis and a $9,000

question 43

Multiple Choice

Mirabelle contributed land with a $5,000 basis and a $9,000 FMV to MS Partnership four years ago. This year the land is distributed to Sergio, another partner in the partnership. At the time of distribution, the land had a $12,000 FMV. What is the impact of the distribution on Mirabelle's partnership basis?

• A) 0
• B) $7,000 increase
• C) $4,000 increase
• D) $4,000 decrease

---

Definitions:

Saving Face

Efforts made by individuals or groups to avoid embarrassment or maintain dignity and respect in the eyes of others.

Appreciative Inquiry

An approach focusing on identifying and building upon an organization's strengths and successes rather than problems.

Discovery

The act or process of finding or learning something new that was not known before.

Dreaming

A series of thoughts, images, and sensations occurring in a person’s mind during sleep.