The December 31, 2019 balance sheet of the LCM Limited Partnership appears below:

Adjusted Fair Market Basis Value Cash $210,000 $210,000 Receivables 0 108,000 Property, Plant & Equipment 42,000 81,000 $252,000 $399,000

Larry, Capital $ 84,000 $133,000 Curly, Capital 84,000 133,000 Moe, Capital 84,000 133,000 $252,000 $399,000

Each partner shares equally in the partnerships capital, income, gains, losses, deductions, and credits. The partnership manufactures high-quality widgets and capital is a material income-producing factor. On December 31, 2019, Curly, the General Partner, receives a distribution of $140,000 cash in retirement of his partnership interest. Nothing is stated in the partnership agreement about goodwill. Curlys outside basis in his partnership interest immediately before the distribution is $84,000.

Required: (1) What are the amount and nature of Curlys gain that result from the distribution? Explain your answer and provide supporting computations. (2) What are the tax consequences to the partnership of making the distribution? (3) What action should the partnership consider and what effect would that action have?