Susan Is a One-Fourth Limited Partner in the SJ Partnership

Essay

Susan is a one-fourth limited partner in the SJ Partnership in which capital is not a material income-producing factor.
Partnership assets consist of land (fair market value of $100,000, basis of $80,000), accounts receivable (fair market value of $100,000, basis of $0) and cash of $200,000. SJ distributes $100,000 of the cash to Susan in liquidation of her interest. Susan's basis in the partnership interest was $70,000 immediately before the distribution. How much gain or loss does Susan recognize and what is its character? How much can the partnership deduct?