George, Harriet and Ingrid are equal Partners in the GHI Partnership. George's Adjusted Basis (AB) in his Partnership Interest is $40,000, Harriet's is $60,000 and Ingrid's is $20,000. The Partnership distributes property to George which has an AB to the Partnership of $100,000 and is subject to a $75,000 liability. George assumes the liability. Is any gain or loss recognized by George, Harriet or Ingrid under § 731 as a result of this distribution? What is each of George, Harriet and Ingrid's AB in their Partnership Interests after the distribution? What is George's AB in the Property distributed to him?
Consider §§ 731, 733, 732, 705, 752