Petra's basis was $50,000 in the PAM Partnership interest just before Petra received a proportionate non liquidating distribution consisting of land held for investment (basis of $40,000; fair market value of $60,000) and inventory (basis of $40,000; fair market value of $40,000). After the distribution, Petra's bases in the land and inventory, respectively, are: 

a. $25,000 and $25,000. 

b. $10,000 and $40,000. 

c. $40,000 and $0. 

d. $40,000 and $40,000. 

e. $40,000 and $10,000.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is e 40000 and 10000 ... View the full answer