Challenge Partners had the following balance sheets at December 31:

	Basis	FMV
Cash	30,000	30,000
Accounts Receivable	0	45,000
Property 1	54,000	60,000
Property 2	36,000	45,000
TOTAL ASSETS	120,000	180,000
Capital, Tina	40,000	60,000
Capital, Jane	40,000	60,000
Capital, Karen	40,000	60,000
TOTAL CAPITAL	120,000	180,000

On that date, it distributed Property 1 to Karen in complete liquidation of her interest in the partnership.

a. Will Section 751(b) apply to this distribution?

b. Will Karen recognize any income or gain in connection with the distribution?

c. What will be Karen's tax basis in Property 1?