Mirabelle Contributed Land with a $5,000 Basis and a $9,000

Mirabelle contributed land with a $5,000 basis and a $9,000 FMV to MS Partnership four years ago. This year the land is distributed to Sergio, another partner in the partnership. At the time of distribution, the land had a $12,000 FMV. What is the impact of the distribution on Mirabelle's partnership basis?

A) 0
B) $7,000 increase
C) $4,000 increase
D) $4,000 decrease

Correct Answer:

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