A partnership is curtailing some of its operations and decides to make a proportionate distribution of excess assets to its two equal partners. P’s share of each of the distributed assets is as follows:

	Inside Basis	Fair Market Value
Cash	$4,000	$4,000
Inventory	5,000	7,000
Investment Stocks	2,000	3,000
Equipment	6,000	2,000

Calculate P’s recognized gain or loss, basis in each asset, and basis in his partnership interest after distribution if P’s basis in the partnership before distribution is:

1. $20,000
2. $14,000, or
3. $8,000