Marilyn Is a Partner in a Continuing Partnership

question 61

Multiple Choice

Marilyn is a partner in a continuing partnership.At the end of the current year,the partnership distributed to Marilyn in a proportionate,nonliquidating distribution cash of $40,000,inventory with a basis to the partnership of $12,000 and a fair market value of $10,000,and a parcel of land with a basis to the partnership of $30,000 and a fair market value of $40,000.Marilyn's basis in the partnership interest was $80,000 before the distribution.What basis does Marilyn take in the inventory and land,and what is her basis in the partnership interest following the distribution?

• A)$12,000 basis in inventory; $30,000 basis in land; $38,000 basis in partnership.
• B)$12,000 basis in inventory; $40,000 basis in land; $28,000 basis in partnership.
• C)$10,000 basis in inventory; $30,000 basis in land; $0 basis in partnership.
• D)$10,000 basis in inventory; $40,000 basis in land; $30,000 basis in partnership.
• E)$12,000 basis in inventory; $28,000 basis in land; $0 basis in partnership.