Andrew Receives a Proportionate Nonliquidating Distribution from the AEF Partnership

Multiple Choice

Andrew receives a proportionate nonliquidating distribution from the AEF Partnership. The distribution consists of $50,000 cash and property (adjusted basis to the partnership of $34,000 and fair market value of $42,000) .Immediately before the distribution, Andrew's adjusted basis in the partnership interest was $40,000.His basis in the noncash property received is:

A) $0.
B) $34,000.
C) $42,000.
D) $50,000.
E) None of the above.