Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. In a proportionate nonliquidating distribution, the LLC distributes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. Required:
a. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?
b. Wylie receives cash of $145,000 in liquidation of his partnership interest, in which he has a basis of $110,000. The partnership owns no hot assets. after following all of the classification requirements of 736, $100,000 of this amount is classified as a property payment and $45,000 is classified as a guaranteed payment. As a result of the liquidation proceeds, how much will Wylie recognize as a capital gain or loss and how much will be ordinary income?