Sam is a 30% partner in the DMS Partnership, a calendar year-end entity. As of the end of this year, Sam has an outside basis in his interest in DMS of $188,000, which includes his share of the $60,000 of partnership liabilities. On December 31, DMS makes a proportionate distribution of the following assets to Sam: Tax Basis | FMV Cash $ 40,000 | $40,000 Inventory 55,000 | 65,000 Land 30,000 | 45,000 Totals $ 125,000 | $150,000

a. What are the tax consequences (amount and character of recognized gain or loss, basis in distributed assets) of the distribution to Sam if the distribution is an operating distribution? b. What are the tax consequences (amount and character of recognized gain or loss, basis in distributed assets) of the distribution to Sam if the distribution is a liquidating distribution? c. Compare and contrast the results from parts (a) and (b).