based on the numbers you gve
basis
original amount put in +$1200
income +$500
total tax basis +$1700
property distribution -$200
basis for gain or loss upon termination $+1500
so proceeds received final distribution $1500 less tax basis $1500 = zero taxable gain
you also have this other property with a $200 tax basis whatever it is
at such time as you dispose of it you will have a gain or loss measured by the difference between the sales price and its tax basis
