Abby is a partner in a partnership. She receives a liquidating distribution as follows: Cash $100 Inventory $40 tax basis; $45 fmv Land $170 tax basis; $250 fmv Abby's outside basis in the partnership at the time of the distribution was $300. You can assume that there was no pre-contribution gain (i.e., built-in gain) or loss in the inventory or land.

a. How much gain or loss does the partnership recognize?

b. How much gain or loss does Abby recognize as a result of the distribution?

c. After the distribution, what is Abby's tax basis in the inventory she receives?

d. After the distribution, what is Abby's tax basis in the land she receives?

e. After the distribution, what is Abby's tax basis in her partnership interest (i.e., outside basis)?

f. Assume instead of the original facts that Abby only receives the cash and inventory (and no land) in the liquidating distribution. How much gain or loss would Abby recognize?

R, J, and M are all equal one-third partners in Partnership RJM. M decides to withdraw from the partnership. At the time of M's withdrawal, the partnership has the following assets: (1) cash $6,000; (2) Greenacre, with a tax basis $2,000 and fair market value $6,000; and (3) Redacre with a tax basis of $3,000 and a fair market value of $6,000. The partnership has no liabilities and each partner's capital account is $4,000. Also, assume that the properties are capital assets and none were contributed by a partner. All appreciation in the properties occurred while the properties were owned by the partnership. Assume that the partners agree to distribute Greenacre to M as a liquidating distribution to M. M's outside basis in the partnership at the time of the distribution is $4,000.

a. How much gain or loss does M recognize as a result of the distribution?

b. What is M's tax basis in Greenacre after the distribution?

c. If the partnership does not have a Section 754 election in place, what is the partnership's tax basis in Redacre after the distribution?

d. If the partnership does have a Section 754 election in place, what is the partnership's tax basis in Redacre after the distribution?