Partnership Distribution

Davey has an outside basis in Feline Partnership of $260,000. The partnership distributes the following assets to Davey in a proportionate, non-liquidating distribution:

• Land (fair market value of $160,000 and basis to partnership of $120,000
• $60,000 cash
• Accounts receivable (fair market value of $120,000 and basis of $0)

1. How much gain or loss will Davey recognize from this distribution?

2. How much gain of loss will Feline Partnership recognize from this distribution?

3. What is Daveys basis in the land? What is Daveys basis in the accounts receivable?

4. What is Daveys outside basis in the partnership following the distribution?

5. How would your answers to the above questions change if the distribution were a liquidating distribution?