10. Mega Partnership distributed inventory (FMV $50,000 and basis $19,000) to partner Q in complete liquidation of her interest in Mega. Immediately prior to the distribution, Q's outside basis in her interest was $27,500. If Mega has a 754 election in effect, which of the following statements is accurate?

a. Mega must recognize a $31,000 ordinary gain on the distribution of its inventory.

b. Mega may increase the basis in its remaining inventory by $31,000.

c. Mega must decrease the basis in its capital and 1231 assets by $8,500.

d. Mega must decrease the basis in its remaining inventory by $8,500.

e. The property distribution has no effect on the basis of Mega's assets because the inventory retains its $19,000 basis in Q's hands.