57. Cliff’s basis in his Aero Partnership interest is

$11,000. Cliff receives a distribution of

$22,000 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:

Tax Basis FMV Assets Cash $22,000 $22,000 Investment 8,800 8,800 Land 2,200 35,200 Totals $33,000 $66,000 Liabilities and capital Capital—Chris $11,000

—Cliff 11,000

—Cooper 11,000 Totals $33,000

a. What is the amount and character of Cliff’s recognized gain or loss? What is the effect on the partnership assets?

b. If Aero has a §754 election in place, what is the amount of the special basis adjustment?