1. If Gabby sells her 1/3 partnership interest to George for $160,000, what is the amount of Gabbys gain or loss recognized? Do not include in answer the ordinary income that will be allocated to Gabby from the $60,000 ordinary business income, but make sure to adjust Gabby's basis before determining her gain/loss recognized.

2. Gabby sold her 1/3 partnership interest to George for $160,000. What amount of the gain on the sale is capital gain?