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:

Totality Principle

A philosophical concept that considers the moral decisions based on the totality of circumstances, including all moral rules and principles.

Beneficence

An ethical principle that involves acting in the best interest of others by promoting their well-being.

Double Effect

A principle in ethics that allows actions which have both a positive effect and a harmful side effect, if the action itself is morally good or neutral, the good effect is intended, and the good outweighs the bad.

Perfect Duty

A moral obligation that must always be followed without exception.