Erin’s basis in her Kiybron Partnership interest is $3,300. Erin receives a distribution of $2,200 cash from Kiybron in complete liquidation of her interest. Kiybron is an equal partnership with the following Balance Sheet:
a. What is the amount and character of Erin’s recognized gain or loss? What is the effect on the partnership assets? b. If Kiybron has a §754 election in place, what is the amount of the special basis adjustment?
Tax Basis $ 2,200 1,100 6,600 $ 9.900 Assets: FMV S 2,200 2,200 2,200 $ 6.600 Cash Stock (investment) Land Totals Liabilities and capital: Capital - Erin - Carl - Grace 3,300 3,300 3,300 $ 9.900 Totals