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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
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 | ||||
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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?
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