A partnership makes a current distribution consisting of cash, hot assets, and land. The distributee partner's outside basis just prior to the distribution (the 'prior basis') is less than the total inside basis of distributed assets but more than the combined amount of cash and the partnership?s basis in the hot assets. Which of the following choices best describes the computation of the amount of the partner's recognized gain and basis in the land received?

Gain

Outside Basis in Land

a.Prior basis ? cashPrior basis after computation of gain ? land

b.Prior basis ? cash ? hot assetsZero because prior basis

c.Prior basis ? cash ? hot assetsRemaining partnership interest basis after computation of gain

d.Zero because prior basis > cash + hot assetsSubstituted partnership interest basis after deduction of cash and hot assets

\f