At the Beginning of the Year, Elsie's Basis in the E&G

question 85

Multiple Choice

At the beginning of the year, Elsie's basis in the E&G Partnership interest is $60,000. She receives a proportionate nonliquidating distribution from the partnership consisting of $10,000 of cash, unrealized accounts receivable (basis of $0, fair market value $30,000) , and inventory (basis of $10,000, fair market value of $20,000) . After the distribution, Elsie's bases in the accounts receivable, inventory, and partnership interest are:

• A) $0; $10,000; and $40,000.
• B) $0; $20,000; and $30,000.
• C) $30,000; $10,000; and $10,000.
• D) $30,000; $20,000; and $0.
• E) None of the above.

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