1. On July 1, the ABC Partnership, a calendar year partnership, distributes to each of its equal partners $10,000 cash and land with a value of $10,000 and a basis of $5,000. A, B and C have outside bases of $20,000, $10,000 and $5,000 respectively. The partnership has the following assets prior to the distribution:

Assets A.B. F.M.V.

Cash $50,000 $50,000

Accounts Receivable 0 20,000

Inventory 20,000 30,000

Land 30,000 60,000

Building 10,000 50,000

1. Discuss the tax consequences of the distribution to A, B, and C, each of whom has owned his partnership interest for several years.
2. What result to C if he receives the land first and the cash in a subsequent separate distribution on October 1?
3. What result to C in (b), above, if the cash distribution on October 1 is a draw against his share of partnership income, which is $20,000 for the year?