If a partner's share of partnership liabilities increases, what is the appropriate tax treatment with respect to the partner's basis? The increase in liabilities does not impact basis. The increase in liabilities is treated as a distribution of cash. The increase in liabilities is treated as a loss item. The increase in liabilities is treated as an income item. The increase in liabilities is treated as a contribution of cash. Question 2 (0.75 points) 1) Listen Jack and Diane formed a partnership, and each received a 50/50 interest. Jack contributed land with AB 60 and FV 100 on the formation of the partnership. Three years after the contribution, the partnership distributed the land to Diane when the land's fair value was 120. How much gain, if any, would be Jack need to recognize on this distribution? 20