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Garner is a 25 percent partner in Classic General Partnership. On February 3, Garner's tax...

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Accounting

Garner is a 25 percent partner in Classic General Partnership. On February 3, Garner's tax basis in
Classic was $10,000 when she received a non-liquidating distribution of $5,000 cash. Classic had
no unrealized receivables, appreciated inventory, or properties that had been contributed by its
partners. Classic reported the following for the same year:
U.S. Treasury interest
$30,000
Ordinary business income $120,000
What amount of income from Classic should Garner include in her gross income for that year?
a. $30,000
b. $7,500
c. $42,500
d. $37,500
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