Eicho's interest in the DPQ Partnership is terminated when her basis in the partnership is $70,000. She receives a liquidating distribution of $20,000 cash and inventory with a $24,000 basis and a $40,000 FMV. What is her gain or loss, and what is her basis in the inventory received?
What will be an ideal response?
She has a recognized loss of $26,000 [($20,000 + $24,000) - $70,000]. Her basis in the inventory she receives is $24,000.
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What will be an ideal response?