The distribution is only taxable if it exceeds your basis before the distribution. This is usually unlikely.
for example, say your basis at the beginning of the year was $600K. $400K the tax basis of the properties + $200K the tax basis you get from certain partnership liabilities. in addition to the properties, the partnership has $200K in cash. (total assets $600K, total liabilities and partners capital $600K - they must equal). The properties are sold for a net of $1M. your gain is $600K. you pay off the $200K in liabilities. tax basis goes up by the $600K gain and down by the $200K decrease in liabilities netting to a tax basis of $1M. Making the $1M cash distribution exactly equal to your tax basis before distribution.
However, there could be situations where the distribution is more than tax basis. We have no way of knowing if you are calculating the tax basis correctly.
