Partnership recognize on the distribution


A partnership distributes land with a fair market value (FMV) of $80,000 and an adjusted basis to the partnership of $65,000, to one of its partners, Ted. Ted's basis in his partnership interest immediately before the distribution is $33,000: What amount of gain will the partnership recognize on the distribution, and what is Ted's basis in the land he receives on the distribution?

a. $15,000 gain; $48,000 basis in the land

b. $0 gain; $65,000 basis in the land

c. $15,000 gain; $65,000 basis in the land

d. $0 gain; $33,000 basis in the land

e. $0 gain; $80,000 basis in the land

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Accounting Basics: Partnership recognize on the distribution
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