At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including Melodie's

Question:

At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including Melodie's $40,000 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (basis of $6,000, fair market value of $10,000). MIP repaid all of its liabilities by the end of the year.
a. If this is a proportionate nonliquidating what is the tax effect of the to Melodie and MIP? After the what is Melodie's basis in the inventory and in her MIP interest?
b. Would your answers to (a) change if this had been a proportionate liquidating Explain.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...