Stacy is a one-third partner in Tyknot Partners. Her basis in her partnership interest is $85,000, consisting of her $25,000 contribution to capital and her $60,000 share of the partnership's $180,000 outstanding liabilities. She receives a non-liquidating distribution consisting of property valued at $125,000 (tax basis $40,000). The distribution reduces her interest in the partnership from one-third to one-fifth. It is not a disproportionate distribution.

a. Will Stacy recognize any gain or loss on receipt of the distribution?

b. What basis will Stacy take in the property received from the partnership?

c. What will be Stacy’s remaining basis in her partnership interest?