From Becker HW Q -

on balance sheet, Partner A capital = $1,000

Partner A outside basis in the partnership = $1,200

in liquidating distribution, Partner A received cash $500.

Partner A recognize a gain of $300.

My question is why $1200 is used?  What's the difference between capital per balance sheet and partner's outside basis in the partnership?  Is $1,000 book basis and $1200 tax basis?

Thanks in advance!