Mikaere's basis in the Jimsoo Partnership is $65,000. In a proportionate liquidating distribution, Mikaere receives cash of $9,400 and two capital assets: (1) Land A with a fair market value of $24,800 and a basis to Jimsoo of $19,600, and (2) Land B with a fair market value of $11,800 and a basis to Jimsoo of $19,600. Jimsoo has no liabilities.

a. How much gain or loss will Mikaere recognize on the distribution? What is the character of any recognized gain or loss?

b. What is Mikaere's basis in the distributed assets?

c1. If the two parcels of land had been inventory to Jimsoo, what are the tax consequences to Mikaere (amount and character of gain or loss)?

c2. What is Mikaere's basis in distributed assets?