The Dominguez Partnership has the following assets on December 31: $\begin{array}{lrr}&\text { Basis } & \text { Fair Market Value }\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Receivables } & 5,000 & 10,000 \
\text { Inventory } & 20,000 & 30,000
\end{array}$ Antonio is a 20 percent partner and has a $7,000 basis in his partnership interest. The partnership has no liabilities. Antonio receives a liquidating distribution of $10,000 cash. What is the amount and character of the gain or income Antonio recognizes on this liquidating distribution?
A) 0
B) $1,000
C) $2,000
D) $3,000

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The Answer of The Dominguez Partnership has the following assets on December 31: $\begin{array}{lrr}&\text { Basis } & \text { Fair Market Value }\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Receivables } & 5,000 & 10,000 \
\text { Inventory } & 20,000 & 30,000
\end{array}$ Antonio is a 20 percent partner and has a $7,000 basis in his partnership interest. The partnership has no liabilities. Antonio receives a liquidating distribution of $10,000 cash. What is the amount and character of the gain or income Antonio recognizes on this liquidating distribution?
A) 0
B) $1,000
C) $2,000
D) $3,000

The Dominguez Partnership Has the Following Assets on December 31