In a Proportionate Liquidating Distribution, Alexandria Receives a Distribution of $70,000

Multiple Choice

In a proportionate liquidating distribution, Alexandria receives a distribution of $70,000 cash, accounts receivable (basis of $0 and fair market value of $20,000) , and land (basis of $30,000 and fair market value of $60,000) . In addition, the partnership repays all liabilities, of which Alexandria's share was $40,000. Alexandria's basis in the entity immediately before the distribution was $90,000. As a result of the distribution, what is Alexandria's basis in the accounts receivable and land, and how much gain or loss does she recognize?

A) $0 basis in accounts receivable; $0 basis in land; $20,000 gain.
B) $0 basis in accounts receivable; $30,000 basis in land; $0 gain or loss.
C) $0 basis in accounts receivable; $0 basis in land; $0 gain or loss.
D) $0 basis in accounts receivable; $30,000 basis in land; $0 gain.
E) $20,000 basis in accounts receivable; $0 basis in land; $20,000 gain.