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Section 736 - liquidating distributions to retiring partner: The December 31 balance sheet of the GAB...

Section 736 - liquidating distributions to retiring partner: The December 31 balance sheet of the GAB LLP reads as follows. Adjusted Basis FMV Cash $300,000 $300,000 Receivables -0- 100,000 Capital assets 60,000 80,000 Total $360,000 $480,000 Gina, capital $90,000 $120,000 Adelle, capital 180,000 240,000 Britney, capital 90,000 120,000 Total $360,000 $480,000 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, Gina receives a distribution of $140,000 cash in liquidation of her partnership interest. 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? b. How much can GAB claim as a deduction?

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