Gina received a proportionate non-liquidating distribution from the GBN Partnership when her basis in the partnership interest was $40,000. She received $10,000 cash, inventory with an A/B of $15,000 and a FMV of $20,000 and equipment with an A/B $30,000 and a FMV of $25,000.

Same facts as above except that the distribution is made up only of two pieces of equipment: Machine 1 (A/B $40,000; FMV $55,000) and Machine 2 ( A/B $30,000; FMV $10,000).

a. Does Gina recognize any gain on this distribution? Why or why not?

b. What basis does Gina take in each of the machines?