Misha Receives a Proportionate Nonliquidating Distribution When the Basis of Her

Multiple Choice

Misha receives a proportionate nonliquidating distribution when the basis of her partnership interest is $60,000.The distribution consists of $80,000 cash and inventory (adjusted basis to the partnership of $10,000,fair market value of $20,000) .How much gain or loss does Misha recognize,and what is her basis in the distributed inventory and in her partnership interest following the distribution?

A) $0 gain or loss;$10,000 basis in inventory;$0 basis in partnership interest.
B) $0 gain or loss;$20,000 basis in inventory;$50,000 basis in partnership interest.
C) $20,000 capital gain;$0 basis in inventory;$0 basis in partnership interest.
D) $20,000 capital gain;$10,000 basis in inventory;$0 basis in partnership interest.
E) $20,000 ordinary income;$0 basis in inventory;$20,000 basis in partnership interest.