Q. Partnership P ("P") has two individual partners (A and B). Each are 50% owners in P. At the beginning of Year 1, A's outside basis was $1,000 and B's outside basis was $10,000. During Year 1 P earned $2,000 of income from operations, $1,000 of tax exempt income, and paid off $10,000 of a recourse liability. What income, gain or loss, if any, will A report on A's individual income tax return (for Year 1) as a result of being a partner in P?