Frank Receives a Proportionate Nonliquidating Distribution from the AEF Partnership

question 11

Multiple Choice

Frank receives a proportionate nonliquidating distribution from the AEF Partnership. The distribution consists of $10,000 cash and property (adjusted basis to the partnership of $54,000 and fair market value of $60,000) . Immediately before the distribution, Frank's adjusted basis in the partnership interest was $50,000. His basis in the noncash property received is:

• A)$0.
• B)$40,000.
• C)$54,000.
• D)$60,000.
• E)None of the above.

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