Mikaere's basis in the Jimsoo Partnership is $61,500. In a proportionate liquidating distribution, Mikaere receives cash of $8,700 and two capital assets: (1) Land A with a fair market value of $23,400 and a basis to Jimsoo of $18,550, and (2) Land B with a fair market value of $11,275 and a basis to Jimsoo of $18,550. Jimsoo has no liabilities.

c1. If the two parcels of land had been inventory to Jimsoo, what are the tax consequences to Mikaere (amount and character of gain or loss)?

c2. What is Mikaere's basis in distributed assets?