A partnership's records show:

Inside Basis FMV

Cash $4,000 $4,000

Inventory 16,000 30,000

Land 8,000 32,000

Equipment 72,000 120,000

Total assets $100,000 $186,000

1.

D's outside basis in her 25% interest in this partnership is $31,000. She receives 25% of all partnership assets as a liquidating distribution. D's basis in the equipment received in the distribution is

		$22,000
		$18,000
		$30,000
		$34,000
		None of the above

2.

In the previous problem, D should recognize

		No gain or loss
		$3,000 gain
		$9,500 gain
		$3,000 loss
		None of the above