Chuck has an outside basis of $190,000 in the Forest Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Chuck a proportionate distribution of $140,000 cash and inventory with an inside basis to the partnership of $10,000 and a fair market value of $30,000. In addition, Chuck receives a desk which has an inside basis and fair market value of $3,400 and $4,600, respectively. None of the distribution is for partnership goodwill. How much gain or loss will Chuck recognize on the distribution, and what basis will he take in the desk?
A. $36,600 loss; $3,400 basis.
B. $35,400 loss; $4,600 basis.
C. $15,400 loss; $4,600 basis.
D. $0 loss; $40,000 basis.