27. (4 pts) On April 1, 2019 Kona invested in a new partnership by contributing land worth $200,000 (adjusted basis $150,000) which had an associated note payable of $100,000. His partnership interest is 40%. The partnership signed a contract to make a cash payment to Kona which was made on May 1, 2019 for $50,000 cash. (Kona retained his ownership interest percentage).

a. How would you expect the IRS to treat these transactions?

b. What alternative do you suggest to Kona?

Assume the payment was made May 1, 2020.

c. What is the tax impact to Kona, if any?

d. What is the value of Konas at-risk amount in the partnership after the distribution?