1. Adam is a partner in Busy Bee Bakery Partnership. Last year he received a distribution of $5,000 cash and land that had an adjusted basis of $5,000 and a fair market value of $10,000. The adjusted basis of his partnership interest at the time of the distribution was $15,000. Select the amount of gain or loss Adam should report for the partnership distribution.

a) $ 5,000

b) $ 0

c) $10,000

d) ($ 5,000)

2. Adam sold the land in the following tax year for $18,000. Select the amount of change to his partnership interest after selling the land. (See Question 1) a) $ 2,000

b) ($ 3,000)

c) $ 5,000

d) $ 0