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  1. business
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  3. note: unless otherwise stated, assume for the foll

Note: unless otherwise stated, assume for the following questions involving nonliquidating distributions that (1) no...

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Accounting

Note: unless otherwise stated, assume for the following questions involving nonliquidating distributions that (1) no contributed property was distributed, (2) all precontribution gain was recognized before the distribution, and (3) the distribution is pro rota.
Colin is a dartner in a general partnership in which he has an outside basis of $56,000 at the end of the year (prior to any distributions). On December 31, Colin receives a proportionate nonliquidating distribution of $6,000 cash and property with a $14,000 fair value and an $8,000 basis to the partnership. What is the amount of Colin's recognized gain (loss), and what is his outside basis after the distribution?
$0 gain (loss), $36,000 basis
$0 gain (losel) $42,000 basis
$6,000 gain, $42,000 basis
$6,000 gain, $36,000 basis
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