Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 12

Roberto has a basis of $6,000 in a partnership at the beginning of the year. He receives $7,000 in cash distributions, his distributive share of income is $3,500, and he receives a land distribution with a basis of $6,000 (FMV $12,000).
a. Is Roberto required to recognize any gain? If so, how much is the gain?
b. What is Roberto's basis in the land?
c. What is Roberto's ending basis in his partnership interest?