Amanda owns 30% of the interests in Becks Partnership. Becks Partnership is taxed as a partnership and has a calendar year-end. Amanda sells her partnership interest to Nick for a cash payment of $300,000. Her basis in the partnership interest is $137,400 at the time of the sale. The partnership had the following assets at the time of the sale. It did not have any liabilities. 

                                               Tax Basis                                                                                FMV

Cash                                     $58,000                                                                                 $58,000 

Inventory                              135,000                                                                                 172,000 

  

Land held for investment  265,000                                                                                  770,000 

Totals                                 $458,000                                                                                 $1,000,000 

b. What is the character of gain or loss recognized by Amanda on the sale of her partnership interest?

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