Ariel receives from her partnership a nonliquidating distribution of $9,000 cash plus a parcel of land.The partnership had purchased the land five years ago for $20,000,but it is worth $28,000 at the time of the distribution.Ariel's predistribution basis is $17,000.How much income will Ariel recognize due to the distribution,and what is her basis in the land?

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B) Ariel reduces her partnership basis by the cash distribution first ($17,000 - $9,000), and the remaining $8,000 basis in her partnership interest is applied to the land. Her partnership basis will be $0, and no income is recognized.

Ariel Receives from Her Partnership a Nonliquidating Distribution of $9,000