Kristen and Harrison are equal partners in the KH Partnership. The partners formed the partnership five years ago by contributing cash. Prior to any distributions Harrison has a basis in his partnership interest of $28,500. On December 31, KH makes a proportionate operating distribution of $41,500 cash to Harrison. What is the amount and character of Harrison's recognized gain or loss and what is his remaining basis in KH?

Multiple Choice

• $0 gain, $0 basis.

• $13,000 capital gain, $0 basis.

• $13,000 capital loss, $0 basis.

• $13,000 capital gain, $28,500 basis.