1. Rufus is a one-quarter partner in the Adventure Partnership. On January 1 of the current year, Adventure distributes $13,000 cash to Rufus in
1. Rufus is a one-quarter partner in the Adventure Partnership. On January 1 of the current year, Adventure distributes $13,000 cash to Rufus in complete liquidation of his interest. Adventure has only capital assets and no liabilities at the date of the distribution. Rufus’s basis in his partnership interest is $18,500.
\r\na. What are the amount and character of Rufus’s recognized gain or loss?
\r\nb. What are the amount and character of Adventure’s recognized gain or loss?
\r\nc. If Rufus’s basis is $10,000 at the distribution date rather than $18,500, what are the amount and character of Rufus’s recognized gain or loss?