Problem 14P

1.  How much taxable income does the partnership report because of the disproportionate distribution to three partners?

2.  How much and what type of taxable income does each partner report because of the disproportionate distribution?

3.  What is each partner's base in his/her partnership interest after the $40,000 distribution to each?

4.  What is Hiram and Fred's basis in the art?

5.  What type of property is the art to each partner?