Partner Z of the XYZ partnership receives a liquidating distribution of the following:

Basis FMV

Cash $40,000 $40,000

Inventory $30,000 $45,000

Unrealized receiv. $50,000 $45,000

1. Zs basis in her partnership interest was $95,000. What is her gain or loss and the bases of the assets distributed to her?

2. Assume Zs basis in her partnership interest was $130,000. What is her gain or loss and the bases of the assets distributed to her?

The capital percentages are already factored in because this is the liquidating distribution that Partner Z is receiving (so the amount allocated has factored this in). The question is what is her gain or loss where a partner receives solely cash, unrealized receivables and inventory items (all ordinary income items) in a liquidating distribution.