Mark contributed property to the MDB Partnership in 2010. At the time of the contribution, the basis in the property was $40,000 and its value was $50,000. In 2014, MDB distributed that property to partner Dara. Because this is a distribution of precontribution gain property, MBD (the partnership) may be required to recognize a gain that is allocated to all of the partners.

Question

Quizplus · Accepted Answer

The partnership recognizes gain only if the distributed property has appreciated in value since the contribution, and the gain is allocated to the contributing partner, not all partners.

Mark Contributed Property to the MDB Partnership in 2010