The December 31, 2015, balance sheet of the GAB LLP reads as follows:

Capital is not a material income-producing factor for the LLP. Gina is an active (general) partner and owner of a 25% interest in the LLP’s profits and capital. On December 31, 2015, Gina receives a distribution of $140,000 cash in liquidation of her partnership interest under § 736. Nothing is stated in the partnership agreement about goodwill. Gina’s outside basis for the partnership interest immediately before the distribution is $90,000.

a. How much is Gina’s recognized gain from the distribution? What is the character of the gain?

b. How much can GAB claim as a deduction?

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FMV $300,000 100,000 Adjusted Basis Cash Receivables Capital assets $300,000 60,000 $360,000 90,000 180,000 90,000 $360,000 80,000 Total Gina, capital Adelle, capital Britney, capital $480,000 $120,000 240,000 120,000 $480,000 Total