Pelican Partnership makes an operating distribution to Prabakhar consisting of $30,000 in cash and capital assets worth $10,000 (partnership basis $8,000). Immediately prior to the distribution, Prabhakars outside basis in the partnership was $35,000. What amount of gain, if any, will Prabhakar recognize on the distribution, and what is Prabhakars resulting outside basis in the partnership?

Recognized Gain	Outside basis in partnership
$5,000	$0

Recognized Gain	Outside basis in partnership
$0	$0

Recognized Gain	Outside basis in partnership
$0	($3,000)

Recognized Gain	Outside basis in partnership
$3,000	$0