interest. Some of the differences can be illustrated in the following example. If a partner held a 20% interest in a partnership, currently worth $200,000 with a basis of $100,000, and wanted to reduce this interest to 10% and receive $100,000, he could structure the disposition in a few different ways with different tax consequences. If the partnership were to buy this 50% of his interest from the partner in a straight sale, this partner would receive his $100,000 but also recognize a taxable gain of $50,000 as a result of the adjustment to the basis of his interest (his basis increased 100%). If, instead, the partnership distributed $100,000 to this partner in a partial distribution of his interest, he would have no gain to be recognized under Section 731(a); his basis in the partnership would merely be reduced to zero. Another partner could then "contribute" $100,000 in capital to the partnership in return for a 10% interest; in effect, if not in form, this second partner purchased the first partner's 10% interest. But the f
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