[Solved] Partner Oliver Received a Distribution of $60,000 Cash from the MNO

Question 7
Multiple Choice

Partner Oliver received a distribution of $60,000 cash from the MNO Partnership in complete liquidation of his partnership interest.If Oliver's outside basis immediately before the distribution was $100,000, and if the partnership has a § 754 election in effect, which of the following statements is true? (Assume the partnership owns no "hot assets.")

A)Oliver will recognize a $40,000 capital loss on the distribution.
B)The partnership will step-up the basis of its assets by $40,000.
C)The partnership is not allowed a step-up adjustment in this situation.
D)The partnership will step-up the basis of its capital and § 1231 assets by $60,000.
E)None of the above.

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