Reconsider the facts of problem 44. Assume the property received by Stacy was encumbered by a mortgage of \(\$ 50,000\), which Stacy assumed in connection with the distribution. Assume the distribution still reduces Stacy's interest in the partnership from one-third to one-fifth. How would your answers change?

Problem 44,

Stacy is a one-third partner in Tyknot Partners. Her basis in her partnership interest is \(\$ 85,000\), consisting of her \(\$ 25,000\) contribution to capital and her \(\$ 60,000\) share of the partnership's \(\$ 180,000\) outstanding liabilities. She receives a non-liquidating distribution consisting of property valued at \(\$ 125,000\) (tax basis \(\$ 40,000\) ). The distribution reduces her interest in the partnership from one-third to one-fifth. It is not a disproportionate distribution.

a. Will Stacy recognize any gain or loss on receipt of the distribution?

b. What basis will Stacy take in the property received from the partnership?

c. What will be Stacy's remaining basis in her partnership interest?