Problem $21-57($LO $21-4,$ LO $21-6)($Algo$)$

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Cliff's basis in his Aero Partnership interest is $$20,200.$ Cliff receives a distribution of $$29,100$ cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:

$$Tax BasisFMVAssets$$Cash$ $29,100$$ $29,100$Investment$27,30027,300$Land$4,20046,400$Totals$ $60,600$$ $102,800$Liabilities and capital$$Capital$$Chris$ $20,200$Capital$$Cliff$ $20,200$Capital$$Cooper$ $20,200$Totals$ $60,600$

Problem $21-57$ Part a $($Algo$)$

Required:

a$-1.$ What are the amount and character of Cliff's recognized gain or loss?

a$-2.$ Will the distribution have any effect on the partnership assets?

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