Cliffs basis in his Aero Partnership interest is $18,500. Cliff receives a distribution of $24,100 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:

			Tax Basis		FMV
Assets:
Cash		$	24,100		$	24,100
Investment			28,800			28,800
Land			2,600			36,700
Totals		$	55,500		$	89,600
Liabilities and capital:
Capital	Chris		18,500
	Cliff		18,500
	Cooper		18,500
Totals		$	55,500

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