Based on the limited facts, it appears that the partnership is still in existence.
The partnership will determine the gain, report the gain on the partnership return and the K-1's.
Keep in mind that some of the gain may need to be reported as unrecaptured section 1250 gain.
The distribution is just reported as any other distribution; Schedule K-1 line 19 Code A.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
