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4. Assume a partnership makes a distribution of land used in their business to a 70%...

4. Assume a partnership makes a distribution of land used in their business to a 70% owner. The partnership purchased the land for $480,000. At the time of the distribution, the land has a FMV of $600,000. The partner’s outside basis is $550,000.

a. What is the tax result to the partnership and the partner on this distribution if it were a non liquidating distribution? (2 Points)

b. What is the tax result to the partnership and the partner on this distribution if it were a liquidating distribution? (2 Points)

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