William's basis in the WAM partnership interest was $100,000 just before he received a proportionate liquidating distribution

Question:

William's basis in the WAM partnership interest was $100,000 just before he received a proportionate liquidating distribution consisting of investment land (basis of $30,000. Fair market value $40,000), and inventory (basis $30,000, fair market value $70,000). After the distribution, William's recognized gain or loss and his basis in the land and inventory are:

a. $40,000 loss; $30,000 (land); $30,000 (inventory)

b. $10,000 gain; $40,000 (land); $70,000 (inventory)

c. $0 gain or loss; $30,000 (land); $70,000 (inventory)

d. $0 gain or loss; $70,000 (land); $30,000 (inventory)

e. None of the above

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...