Pelican Partnership makes a current distribution to Prabhakar, consisting of $30,000 in cash and capital assets worth

Question:

Pelican Partnership makes a current distribution to Prabhakar, consisting of $30,000 in cash and capital assets worth $10,000 (partnership basis $8,000). Immediately prior to the distribution, Prabhakar’s outside basis in the partnership was $35,000. What amount of gain will Prabhakar recognize on the distribution, and what is Prabhakar’s resulting outside basis in the partnership?

a b. Recognized Gain $5,000 $0 $0 $3,000 Outside Basis in Partnership $0 $0 ($3,000) $0