Problem: Cliff's basis in his Aero Partnership interest is $11,000. Cliff receives a distribution of $22,000 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:
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Tax Basis
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FMV
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Assets:
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Cash
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$22,000
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$22,000
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Investment
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8,800
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8,800
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Land
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2,200
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35,200
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Totals
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$33,000
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$66,000
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Liabilities and capital:
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Capital
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- Chris
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11,000
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- Cliff
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11,000
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- Cooper
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11,000
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Totals
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$33,000
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Required: If Aero has a §754 election in place, what is the amount of the special basis adjustment?