Question: Mark, Pete and Mickey are equal partners in the 2MP Partnership, a general partnership. On January 1, 2016, Marks adjusted basis in his partnership interest

Mark, Pete and Mickey are equal partners in the 2MP Partnership, a general partnership. On January 1, 2016, Marks adjusted basis in his partnership interest was $15,000, Petes adjusted basis in his partnership interest was $10,000, and Mickeys adjusted basis in his partnership interest was $20,000. The partnership had taxable income of $30,000 in 2014 which was allocated equally among the partners. On December 31, 2016, the partnership made a non-liquidating distribution of $25,000 cash to Pete. How much income or gain did Pete recognize as a result of the distribution?

a. 0

b. $5,000

c. $15,000

d. $25,000

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