How much gain or loss does suzy recognize

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Problem 1: Suzy owns a 30% interest in the JSD LLC. In liquidation of the entity, Suzy receives a proportionate distribution of $30,000 cash, inventory (basis of $16,000, fair market value of $18,000), and land (basis of $25,000, fair market value of $30,000). Suzy's basis in the entity immediately before the distribution was $80,000. As a result of the distribution, what is Suzy's basis in the inventory and land, and how much gain or loss does she recognize?

Option 1: $0 basis in inventory; $25,000 basis in land; $0 gain or loss.
Option 2: $16,000 basis in inventory; $34,000 basis in land; $0 gain or loss.
Option 3: $16,000 basis in inventory; $25,000 basis in land; $9,000 loss.
Option 4: $18,000 basis in inventory; $32,000 basis in land; $0 gain.

Reference no: EM132965234

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