Jack and Jill are partners of JJ Partnership (a general partnership). Jack has an outside basis of $12,000 and Jill has an outside basis of $25,000. At the end of the year the partners have the following tax items on their respective K-1s: $10,000 of bottom line income, $50,000 of net LTCL and $3,000 of net 1231 gain. Each partner also received a distribution of $30,000 of cash during the year. As a result of the cash distribution Jill will realize and recognize:
$25,000 of gain
$13,000 of gain
$0 gain
$30,000 of gain