At the beginning of 20X3, Margaret's tax basis in her 30 percent interest in MP partnership is $3,000. During 20X3, Margaret does not make any additional contributions to MP and her share of MP liabilities does not change. During 20X3, MP distributes $5,000 to Margaret and reports the following items of partnership income, deduction, gain and loss.

Taxable income

$15,000

Tax-exempt interest

6,000

Section 1231 loss

(10,000)