Stone and Frazier decided to terminate the Woodwest Partnership
as of December 31. On that date, Woodwest’s balance
sheet was as follows:
Land (adjusted basis) 2,000
The fair market value of the land 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?