Martha Receives a Proportionate Nonliquidating Distribution When the Basis of Her

Multiple Choice

Martha receives a proportionate nonliquidating distribution when the basis of her partnership interest is $50,000.The distribution consists of $60,000 cash and noninventory property (adjusted basis to the partnership of $20,000, fair market value of $23,000) .How much gain or loss does Martha recognize, and what is her basis in the distributed property and in her partnership interest following the distribution?

A) $0 gain or loss; $20,000 basis in property; $0 basis in partnership interest.
B) $0 gain or loss; $23,000 basis in property; $2,000 basis in partnership interest.
C) $10,000 capital gain; $0 basis in property; $0 basis in partnership interest.
D) $10,000 capital gain; $20,000 basis in property; $0 basis in partnership interest.
E) $10,000 ordinary income; $0 basis in property; $10,000 basis in partnership interest.