LO.1 When Melanie’s outside basis in the TMF Partnership is $200,000, the partnership distributes to her $40,000 cash, an account receivable (fair market value of $80,000, inside basis to the partnership of $0), and a parcel of land (fair market value of

$200,000, inside basis to the partnership of $180,000). Melanie remains a partner in the partnership, and the distribution is proportionate to the partners.

a. Determine the recognized gain or loss to the partnership as a result of this distribution.

b. Determine the recognized gain or loss to Melanie as a result of the distribution.

c. Determine Melanie’s basis in the land, account receivable, and TMF Partnership after the distribution.