In January of 2015, joey contributed investment land he had held for two years with a Fair market value of $6000 and an adjusted basis of $10,000, and Rachel contributed $6,000 cash to form Green Partnership as equal general partners. During 2015, the partnership earned ordinary income of $10,000 and made no distributions. On January 1, 2016 while the partnership still held the land, joey sold his interest in the partnership to Phoebe for $11,000. In April of 2016, Green partnership sold for $5,400the land that Joey contributed. What are the tax consequences of the transactions? Briefly discuss your opinion of general partnerships and joint and several liability.

Section 721

Section 704 (c)

Section 705

Section 741

Reg. Sec. 1.1704-1(c)