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Gavin, a 5 0 percent partner in the ABC Partnership, had a $ 4 , 0 0 0 basis at the beginning of the preceding

Gavin, a 50 percent partner in the ABC Partnership, had a $4,000 basis at the beginning of the preceding year. During the preceding year, ABC incurred a $12,000 loss. In the current year, ABC reported $7,000 of ordinary income and made a $1,000 pro rata distribution. What is Gavin's basis at the end of the current year?
$3,000
$6,500
$3,500
$1,000
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