49-Pettifog Partnership distributes cash of $20,000, hot assets worth $5,000, and a parcel of land in a liquidating distribution to Li, a partner. The hot assets have a basis of $0 to the partnership. The land has a fair market value of $80,000 and an inside basis of $55,000. Lis outside basis in Pettifog just prior to the distribution is $85,000. What amount of gain or loss, if any, must Li recognize and what is Lis resulting basis in the land?

Multiple Choice

• Gain or Loss	Basis in land
  $5,000 loss	$0

• Gain or Loss	Basis in land
  $0	$60,000

• Gain or Loss	Basis in land
  $0	$65,000

• Gain or Loss	Basis in land
  $10,000 loss	$0