Paula's basis in her partnership interest is $60,000. In liquidation of her interest, the partnership makes a proportionate distribution to Paula of $20,000 cash and inventory (basis of $5,000 and value of $7,000). (Assume that the partnership also liquidates.)

If an amount is zero, enter "0".

a. Complete the table below using the format of Concept Summary 11.4 to calculate the effects of the distribution.

Note: If you use Excel to set up the table, designate an inputs area for the amounts on lines 1, 2, 5, and 8. Code the formulas shown in the Calculations section to determine the amounts in the remaining lines. You will use "sum," "min," "max," and "if/then/else" formulas.

Input
	Line 1	Partner's outside basis
	Line 2	Step 1. Cash and deemed cash distributed
	Line 5	Step 2. Partnership's basis in distributed hot assets
	Line 8	Step 3. Partnership's basis in other distributed property
Proportionate Liquidating Distribution Calculations
	Line 1	Partner's outside basis	$f
	Line 2	Step 1. Cash and deemed cash distributed	$fill in the blank b9fde102dfec058_6
	Line 3	Gain recognized by partner	$fill in the blank b9fde102dfec058_7
	Line 4	Partner's remaining outside basis	$fill in the blank b9fde102dfec058_8
	Line 5	Step 2. Partnership's basis in distributed hot assets	$fill in the blank b9fde102dfec058_9
	Line 6	Partner's basis in distributed hot assets	$fill in the blank b9fde102dfec058_10
	Line 7	Partner's remaining outside basis	$fill in the blank b9fde102dfec058_11
	Line 8	Step 3. Partnership's basis in other distributed property	$fill in the blank b9fde102dfec058_12
	Line 9	Partner's basis in other distributed property	$fill in the blank b9fde102dfec058_13
	Line 10	Loss recognized by partner	$fill in the blank b9fde102dfec058_14
	Line 11	Partner's remaining outside basis	$fill in the blank b9fde102dfec058_15

b. How much gain or loss, if any, will Paula recognize on the distribution? $fill in the blank

c. What basis will Paula take in the inventory? $fill in the blank

d. What happens if the partnership also distributes artwork to Paula with a basis of $1,000 and a fair market value of $30,000? The basis in property is to $fill in the blank

e. Return to the original facts. Conceptually, how would your answer to parts (b) or (c) change if this had been a current distribution? If this had been a current distribution, would be recognized, and Paula would have a $fill in the blank outside basis remaining for her partnership interest and a $fill in the blank basis in the inventory.