The fair market value has the total amount which is about 24,000. So per the worksheet 7-3, p. 58 I added the distribution (about 5,000) plus the fair market value which gave me line 8 (total of 29,000). Then I divided the original basis of 2,000 (since no contributions have been made) by that total of 29,000. I used this number and multiplied it by the distribution (5,000) to determine the amount of basis allocated to to the distribution which is tax free. Does that sound correct?
Thanks!
