Cliffs basis in his Aero Partnership interest is $16,500. Cliff receives a distribution of $28,700 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:

		Tax Basis		FMV
Assets:
Cash	$	28,700		$	28,700
Investment		16,800			16,800
Land		4,000			46,800
Totals	$	49,500		$	92,300
Liabilities and capital:
Capital Chris	$	16,500
Cliff		16,500
Cooper		16,500
Totals	$	49,500

a-1.	What is the amount and character of Cliffs recognized gain or loss?

a-2.

Will the distribution have any effect on the partnership assets?

	Yes
	No

b.	If Aero has a 754 election in place, what is the amount of the special basis adjustment?