Ace Inc.'s basis in its partnership interest is $60,000 immediately before the following liquidating distribution. Ace's basis in the partnership of $60,000 includes his share of partnership liabilities in the amount of $10,000. Ace receives cash of $5,000 and inventory worth $40,000 with a basis to the partnership of $30,000. Ace will recognize and report on its tax return a loss of $15,000 .

Select one:

a.True

b.False

Jeremy receives a proportionate, liquidating distribution consisting of $25,000 cash and inventory with a basis to the partnership of $15,000 and a fair market value of $6,000. Jeremy's basis in his partnership interest was $35,000 immediately before the distribution. What is Jeremy's basis in the inventory received?

Select one:

$6,000

$10,000

$15,000

$0

Jeremy receives a proportionate, liquidating distribution consisting of $25,000 cash and inventory with a basis to the partnership of $15,000 and a fair market value of $6,000. Jeremy's basis in his partnership interest was $35,000 immediately before the distribution.What is Jeremy recognized gain or loss from this distribution?

Select one:

No gain or loss

Loss of $10,000

Gain of $9,000

Loss of $4,000