Choice "b" is correct. In a complete liquidation of a partnership, the amount of cash distributed initially reduces the basis of the partner in the partnership (outside basis). In this question, the partner's $60,000 basis in the partnership is reduced to $30,000 by the $30,000 cash distribution. The $30,000 remaining partner basis in the partnership is given to the other property distributed (in this question, the only property distributed was the automobile).

Choice "d" is incorrect. The $0 indicates that the automobile was given no basis. That would happen only if the cash distributed exceeded the partner's basis in the partnership before the liquidation and distribution.

Choice "c" is incorrect. The $10,000 is the difference between the amount received in cash and the (fair) market value and basis of the automobile to the partnership. That amount does not represent the basis of the automobile after the distribution.

Choice "a" is incorrect. The $20,000 is the (fair) market value of the automobile at the date of the liquidation and distribution. That basis does not necessarily carry over to the partner.