Interest in continuing the partnership

Reference no: EM13140740

Barry owns a 25% interest in a continuing partnership. the partnership distributes a $20,000 year-end cash bonus to all the partners. in a proportionate nonliquidating distribution, the partnership also distributed property (basis of $2,000; fair market value of $3,000) to barry. Immediately before the distribution, Barry's basis in the partnership interest was $30,000. As a result of the distribution, Barry recognizes:

a. No gain or loss

b. Ordinary loss of $7,000

c. Capital loss of $7,000

d. Ordinary loss of $8,000

e. Capital loss of $8,000

Reference no: EM13140740

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