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

question 14

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)$4,000 increase
• C)$4,000 decrease
• D)$7,000 increase

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Definitions:

Insider Trading

The illegal activity of trading a public company's stock or other securities by individuals with access to non-public, material information about the company.

Material Nonpublic Information

Confidential, significant information about a company that has not been released to the public and could affect its stock price or investment decisions.

Financial System

The complex of institutions, including banks, markets, and regulators, that facilitate the flow of funds between savers and borrowers.

Open Market Operations

Central bank activities that involve the buying and selling of government securities in the market to influence liquidity and interest rates.