Stone and Frazier decided to terminate the Woodwest Partnership as of December 31. On that date, Woodwest’s balance sheet was as follows:
|
Cash |
$2,000 |
|
|
Land (adjusted basis) |
2,000 |
|
|
Capital—Stone |
3,000 |
|
|
Capital—Frazier |
1,000 |
|
The fair market value of the equipment was $3,000. Frazier’s outside basis in the partnership was $1,200. Upon liquidation, Frazier received $1,500 in cash. What gain should Frazier recognize?
- $0
- $250
- $300
- $500