Essay
On December 31,Kate receives a $28,000 liquidating distribution from the KLM Partnership.On that date,Kate's basis in her limited partnership interest is $18,000 (which,of course,includes her share of partnership liabilities).The other partners assume her $6,000 share of liabilities.Just prior to the distribution,the partnership has the following balance sheet.Kate is leaving the partnership but the partnership is continuing.
What is the amount and character of the gain that Kate must recognize on the liquidating distribution?
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