5.2 Individuals A, B and C formed Partnership ABC by making equal contributions of cash. Each was an equal one-third partner. C later sold her partnership interest to D for $200,000 in an arms-length transaction. The partnership has not made a section 754 election. Its balance sheet (expanded to show the fair market values of assets) is as follows: The partnership liquidates D's interest by distributing to her $30,000 of receivables and $170,000 in cash. Assume that D's outside basis has not changed since the date of purchase. What are the tax consequences of this distribution to D ? a) No income or loss, $30,000 basis in the distributed receivables b) Capital loss of $30,000,$0 basis in the distributed receivables c) Capital loss of $60,000,$30,000 basis in the distributed receivables d) Capital gain of $110,000, $0 basis in the distributed receivables