Milton contributed property to the MDB Partnership in 2007.At the time of the contribution,the basis in the property was $10,000 and its value was $15,000.In 2010,MDB distributed that property to partner Dana.Milton may be required to recognize gain on the distribution to Dana.

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When property is contributed to a partnership, the partner's basis in their partnership interest increases by the amount of the contributed property's basis. If the partnership distributes property to a partner with a fair market value greater than their basis in the partnership interest, the partner may be required to recognize gain on the distribution. In this scenario, if the value of the property distributed to Dana is greater than Milton's basis in his partnership interest, he may need to recognize gain on the distribution.

Milton Contributed Property to the MDB Partnership in 2007