Gail received a proportionate non-liquidating distribution from the GBN Partnership when her basis in the partnership interest was $40,000. She received $10,000 cash, inventory with an A/B of $15,000 and a FMV of $20,000 and equipment with an A/B $30,000 and a FMV of $25,000. a. Does Gail recognize any gain on this distribution? Why or why not? b. What basis does Gail take in the inventory and the equipment? c. How would your answers to a and b change if the amount of cash received was $60,000 rather than $10,000?
