Question: The CL Partnership has two partners, Cleo and Leo. Each partners basis in his or her partnership interest is $10,000 before any distribution. The partnership

The CL Partnership has two partners, Cleo and Leo. Each partner’s basis in his or her partnership interest is $10,000 before any distribution. The partnership distributes $12,000 cash to Cleo and $8,000 cash to Leo.
a. Assuming a current distribution, determine for each partner (1) gain on loss recognized and (2) basis in the partnership interest after the distribution.
b. Assuming a liquidating distribution, determine each partner’s gain or loss recognized.

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