The Remington Partnership plans to distribute $180,000 cash to its partners at the end of the year. Sarah is a 40% partner and would receive $72,000. Her basis in the partnership is only $9,000, however, so she would be required to recognize a $63,000 gain if she receives a cash distribution. She has asked the partnership instead to purchase a parcel of land she has found, on which she will build her retirement residence. The partnership will then distribute that land to her. Under the partnership distribution rules, Sarah would take a $9,000 basis in land worth $72,000. Her basis in the partnership would be reduced to $0, and the $63,000 gain is deferred.

Do you think this is an appropriate transaction? Why or why not?