Frank Receives a Proportionate Nonliquidating Distribution from the AEF Partnership

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.