Martha receives a proportionate nonliquidating distribution when the basis of her partnership interest is $50,000.The distribution consists of $60,000 cash and noninventory property (adjusted basis to the partnership of $20,000, fair market value of $23,000).How much gain or loss does Martha recognize, and what is her basis in the distributed property and in her partnership interest following the distribution?
A)$0 gain or loss; $20,000 basis in property; $0 basis in partnership interest.
B)$0 gain or loss; $23,000 basis in property; $2,000 basis in partnership interest.
C)$10,000 capital gain; $0 basis in property; $0 basis in partnership interest.
D)$10,000 capital gain; $20,000 basis in property; $0 basis in partnership interest.
E)$10,000 ordinary income; $0 basis in property; $10,000 basis in partnership interest.

Question

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The Answer of Martha receives a proportionate nonliquidating distribution when the basis of her partnership interest is $50,000.The distribution consists of $60,000 cash and noninventory property (adjusted basis to the partnership of $20,000, fair market value of $23,000).How much gain or loss does Martha recognize, and what is her basis in the distributed property and in her partnership interest following the distribution?
A)$0 gain or loss; $20,000 basis in property; $0 basis in partnership interest.
B)$0 gain or loss; $23,000 basis in property; $2,000 basis in partnership interest.
C)$10,000 capital gain; $0 basis in property; $0 basis in partnership interest.
D)$10,000 capital gain; $20,000 basis in property; $0 basis in partnership interest.
E)$10,000 ordinary income; $0 basis in property; $10,000 basis in partnership interest.

Martha Receives a Proportionate Nonliquidating Distribution When the Basis of Her