In 2022, Oscar and Andy pooled their resources to form Feline&Canine Partnership. They will both work actively in the business and they have agreed to share profits and losses 50-50. To form this partnership, Oscar contributed manufacturing equipment with a FMV of $1,000,000 and a basis of $100,000. Andy contributed $400,000 of cash and land with a fair market value of $800,000 and a basis of $500,000. The equipment contributed by Oscar was not encumbered by debt. The land contributed by Andy had a $200,000 mortgage (qualified nonrecourse debt) which was assumed by FELINE&CANINE Partnership.

In 2023, when Oscars outside basis is $180,000, Oscar received a proportionate non-liquidating distribution as follows:

Adjusted basis Fair Market Value

Cash $130,000 $130,000

Inventory 20,000 45,000

Office equipment 60,000 80,000

1. How much gain or loss much FELINE&CANINE Partnership recognize as a result of this distribution?
2. What is Oscars basis in the assets he receives in this distribution?
3. What is Oscars outside basis in his partnership interest following the distribution?