Marla Davis has a $50,000 outside basis in her partnership interest and decides to terminate her interest. She receives the following from the partnership in full redemption of her partnership interest:

Item Fair Value Partnership's Basis

Cash 35,000 35,000

Inventory 20,000 10,000

As a result of this distribution, she has a zero basis in her partnership interest and ---

Question options:

	a $5,000 capital loss and a $10,000 basis in the inventory
	no gain or loss and a $15,000 basis in the inventory
	none of the above