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.

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

b. What basis does Gina take in the inventory and the equipment?

c. How would your answer to a. change if the amount of cash received was $50,000 rather than $10,000?