Two Years Ago, Tom Contributed Investment Land with a Basis

question 4

Essay

Two years ago, Tom contributed investment land with a basis of $50,000 and an FMV of $62,000 to the RST Partnership. This year, Tom has a basis in his partnership interest of $53,000 when he receives a current distribution of $14,000 cash and inventory with a basis of $35,000 and an FMV of $52,000. (There is no Sec. 751 exchange in connection with the inventory distribution.)The partnership continues to hold the land Tom contributed. How much gain (if any)must Tom recognize as a result of this distribution?

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Definitions:

Bone Cells

Specialized cells that make up bone tissue, responsible for the creation, maintenance, and repair of bone.

Diaphysis

The shaft or central part of a long bone, located between the bone's two ends.

Yellow Bone Marrow

A type of bone marrow primarily composed of fat cells, found in the cavities of long bones, and plays a role in the storage of fats.

Tarsals

A group of seven small bones that form the ankle and proximal part of the foot.