Jose owns a 60% interest in the JKL Partnership. What are the amount and character of the recognized gain or loss in each of the following situations?
a. Jose sells common stock held as an investment with a $1,000 adjusted basis and a $3,000 FMV to the partnership. Jose held the stock for more than one year as an investment before the sale. The partnership also held the stock as an investment after the sale.
b. Jose sells a parcel of land held for investment purposes with a $10,000 adjusted basis and a $25,000 FMV to the partnership. The land is used in the partnership’s business.
c. The partnership sells Jose a building used in its business with a $100,000 adjusted basis and a $60,000 FMV.