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Whitney is a 25% partner in the WRW Partnership. On January 1, WRW distributes $80,000...

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Accounting

Whitney is a 25% partner in the WRW Partnership. On January 1, WRW distributes $80,000 cash to Whitney. WRW has no hot assets or liabilities at the date of the distribution. Whitneys basis in WRW is $56,000. What is the amount and character of Whitneys gain or loss from the distribution?

  • $24,000 ordinary income.

  • $24,000 capital gain.

  • $0.

  • $24,000 capital loss.

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