Latesha contributes a building with a FMV of $125,000 and a basis of $115,000 to a partnership on January 4, 2012. On December 15, 2015, the partnership distributed the building to Katie, a partner in the same partnership. At distribution, the building had a FMV of $129,000.
a. What is the effect of the distribution on Latesha, if any?
b. What is the effect of the distribution to Katie?
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