Jenna Harvey has a $50,000 outside basis in her partnership interest and decides to terminate her interest. She receives the following from the partnership:

Item Fair Value Partnerships Basis

Cash 30,000 30,000

Securities* 15,000 10,000

Inventory 10,000 5,000

* The securities are considered non-marketable and subject to the normal partnership distribution rules

Assume the same facts except as the question above except that Jenna received only the cash and inventory. Jenna would have ---

a. no gain or loss and a $5,000 basis in the inventory

b. a loss of $10,000 and a $10,000 basis in the inventory

c. no gain or loss and a $10,000 basis in the inventory

d. a $15,000 loss and a $5,000 basis in the inventory