Nicole's basis in her partnership interest was $160,000, including her $50,000 share of partnership liabilities. The partnership decides to liquidate, and after repaying all liabilities, distributes all remaining assets proportionately to the partners. Nicole receives $30,000 cash and accounts receivable with a $50,000 basis and a $52,000 fair market value to the partnership. What gain or loss does Nicole recognize, and what is her basis in the accounts receivable?

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Nicole's basis in the partnership interest is $160,000. She receives $30,000 cash and accounts receivable with a $50,000 basis. Her total received basis is $80,000 ($30,000 cash + $50,000 accounts receivable). The loss is $30,000 ($160,000 - $80,000). Her basis in the accounts receivable is $50,000.

Nicole's Basis in Her Partnership Interest Was $160,000, Including Her