wp soverall accounting method. d. Whether to claim a $ 179 deduction related to property acquired by e. All of these elections are made by the partnership. tion related to property acquired by the partnership 19. The December 31 balance sheet of GST Services, LLP reads as follows. Cash Receivables Capital assets Total Adjusted Basis $300,000 -0- 120.000 $420,000 FMV $300,000 150,000 150.000 $600,000 George, capital Sue, capital Tom, capital Total S140,000 140,000 140.000 $420,000 $200,000 200,000 200.000 $600,000 The partners share equally in partnership capital, income, gain, loss, deduction, and credit. Capital is not a material income-producing factor to the partnership, and all partners are active in the business. On December 31, general partner Sue receives a distribution of $200,000 cash in liquidation of her partnership interest under $ 736. Sue's outside basis for the partnership interest immediately before the distribution is $150,000. (Her basis does not correspond to her capital account because she purchased the interest a few years ago at a $10,000 premium.) How much is Sue's gain or loss on the distribution and what is its character? a. $50,000 ordinary income. b. $40,000 ordinary income; $10,000 capital gain. c. $40,000 capital gain; $10,000 ordinary income. d. $60,000 ordinary income. e. $50,000 ordinary income; $10,000 capital gain