Distributions
Response to the following problem:
PJ partnership distributes $6,000 cash and land worth $50,000 (adjusted basis of $56,000) to one of its partners, Patrick.
a. What are the tax consequences of the distribution if Patrick's basis in PJ partnership is $80,000 immediately before the distribution?
b. How, if at all, would your answer to Part a. change if the cash distribution was $60,000 (instead of $6,000)?
c. How, if at all, would your answer to Part a. change if the cash distribution was $85,000 (instead of $6,000)?