In 2016,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2017,when the FMV of the land is $28,000,the partnership distributes the land to Shelia,another partner.What is the basis of the land to Shelia assuming she has a $40,000 basis in her partnership interest?

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When Angel contributes the land to the partnership, the partnership takes on Angel's basis of $12,000. When the partnership distributes the land to Shelia, her basis in the land will also be $12,000 (the partnership's basis). However, Shelia's basis in her partnership interest is $40,000, meaning she has an excess basis of $28,000 ($40,000 - $12,000). Since the FMV of the land at the time of distribution is also $28,000, Shelia's basis in the land will be increased by that amount to match her excess basis. Therefore, Shelia's basis in the land is $22,000 (partnership basis) + $28,000 (excess basis increase) = $50,000. However, since Shelia's basis in the partnership interest is only $40,000, she will not have any taxable gain on the distribution of the land.

In 2016,Angel Contributes Land to a Partnership with a Basis