Complete the paragraph below that outlines the issues that may arise if a partner contributes appreciated property to a partnership and then other property is later distributed to that partner. If appreciated property is contributed to the partnership and other appreciated property is later distributed to that partner, the distribution of the other property may trigger gain recognition to the Gain is recognized to the extent of the precontribution gain or (2) the fair market value of the distributed property the distribution. If the property distribution occurs more years after the initial contribution, this rule does not apply and ordinary distribution rules are followed. of (1) the over the partner's basis in the partnership Interest than by the amount of gain recognized. In addition, the the partnership The partner's basis in the partnership interest is partnership's basis in the original precontribution gain property is increased by that amount, has a 5754 election in effect.