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George and Morris formed a new partnership three years ago. At inception George contributed equipment with a basis of $97,000 and FMV of $101,000. This
George and Morris formed a new partnership three years ago. At inception George contributed equipment with a basis of $97,000 and FMV of $101,000. This year (three years later), the equipment is distributed to Morris when its FMV is $116,000. No other distributions have been made since the partnership was formed. How much pre-contribution gain is allocated to George when the property is distributed to Morris?
Select one:
a. $15,000
b. $4,000
c. $19,000
d. $0
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