Jamahl has a 65% interest in a partnership. Jamahl sells land to the JK partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Two years later, the partnership sells the land for $123,000. Due to the sale, the partnership will recognize

Question

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The partnership recognizes a gain of $33,000, calculated as the sale price of $123,000 minus the adjusted basis of $90,000. The initial sale to the partnership does not affect the basis for gain calculation.

Jamahl Has a 65% Interest in a Partnership