Problem 11-43 (a) (LO. 6)

The December 31 balance sheet of the Gemco LLP reads as follows.

	Adjusted Basis		FMV
Cash	$215,000		$215,000
Receivables	-0-		77,000
Capital assets	40,000		48,000
Total	$255,000		$340,000
Felix, capital	$63,750		$85,000
Fernando, capital	63,750		85,000
Francesca, capital	127,500		170,000
Total	$255,000		$340,000

Capital is not a material income-producing factor for the LLP. Felix is an active (general) partner and owner of a 25% interest in the LLP's profits and capital. On December 31, Felix receives a distribution of $94,000 cash in liquidation of his partnership interest. Nothing is stated in the partnership agreement about goodwill. Felix's outside basis for the partnership interest immediately before the distribution is $63,750.

a. How much is Felix's recognized gain from the distribution?

Capital gain:	$
Ordinary income:	$

All payments that are not classified as 736(b) property payments are categorized as 736(a) income payments.

b. How much can Gemco claim as a deduction? $