The general rule is that a nonliquidating distribution to a partner is nontaxable; therefore, the net book value should be used for property...

The general rule is that a nonliquidating distribution to a partner is nontaxable; therefore, the net book value should be used for property distributions. If a partner has a basis of $20,000 and receives a property distribution with a fair market value of $100,000 and a net book value of $30,000, why doesn’t the partner have a taxable gain?