Partnership Formation to Dissolution.Timothy is a 35 percent partner in the Tota

Partnership Formation to Dissolution.Timothy is a 35 percent partner in the Total Partnership a calendar-year-end entity. Timothy has an outside basis in his interest in Total of $198000 which includes his share of the $45000 of partnership liabilities. On December 31 Total makes a proportionate distribution of the following assets to Timothy: Basis FMV Cash $50000 $50000 Inventory 65000 75000 Land 50000 65000 Totals $165000 $180000 1.For an operating distribution outline the tax consequences (amount and character of recognized gain or loss basis in distributed assets) of the distribution to Timothy. 2.For a liquidating distribution outline the tax consequences (amount and character of recognized gain or loss basis in distributed assets) of the distribution to Timothy. 3.Discuss the similarities and differences between the tax consequences of the operating distribution and the tax consequences of the liquidation distribution.