Amanda owns 30% of the interests in Becks Partnership. Becks Partnership is taxed as a partnership and has a calendar year-end. Amanda sells her partnership interest to Nick for a cash payment of $300,000. Her basis in the partnership interest is $137,400 at the time of the sale. The partnership had the following assets at the time of the sale. It did not have any liabilities.

Tax Basis FMV

Cash $58,000 $58,000

Inventory 135,000 172,000

Land held for investment 265,000 770,000

Totals $458,000 $1,000,000

a. What is the total amount of gain or loss recognized by Amanda on the sale of her partnership interest?

b. What is the character of gain or loss recognized by Amanda on the sale of her partnership interest?