SBT partnership distributes $5,000 cash and a parcel of land with a fair market value of $40,000 and a $25,000 basis to the partnership to Sam (30 partner) What factors must Sam and SBT consider in determining the tax treatment of this distribution ...

SBT and Sam must determine if the distribution is an operating or a liquida ...

SBT partnership distributes $5,000 cash and a parcel of land with a fair market value of $40,000

Question:

SBT distributes $5,000 cash and a parcel of land with a fair market value of $40,000 and a $25,000 basis to the to Sam (30% partner). What factors must Sam and SBT consider in determining the tax treatment of this distribution?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...