Randolph is a 30percent partner in the RD Partnership. On January 1, RD distributes $25,000 cash and inventory with a fair value of $30,400 (inside basis of $15,200) to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $43,700. What is the amount and character of Randolph's gain or loss on the distribution?
A) $0 gain or loss.
B) $11,700 capital gain.
C) $11,700 capital loss.
D) $3,500 capital loss.

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The Answer of Randolph is a 30percent partner in the RD Partnership. On January 1, RD distributes $25,000 cash and inventory with a fair value of $30,400 (inside basis of $15,200) to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $43,700. What is the amount and character of Randolph's gain or loss on the distribution?
A) $0 gain or loss.
B) $11,700 capital gain.
C) $11,700 capital loss.
D) $3,500 capital loss.

Randolph Is a 30percent Partner in the RD Partnership