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Mandarini Mandarini
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7 years ago
Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash. At the time of the sale, the partnership has no liabilities and its assets are as follows:

   Basis   FMV
Cash   $20,000   $20,000
Unrealized receivables   -0-   40,000
Inventory   10,000   40,000
Land (Sec. 1231)   110,000   100,000

The receivables and inventory are Sec. 751 assets. There is no agreement concerning the allocation of the sales price. Steve must recognize
A) no gain or loss.
B) $12,000 ordinary income.
C) $12,000 capital gain.
D) $14,000 ordinary income and $2,000 capital loss.
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
Authors:
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strwbrrystrwbrry
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7 years ago
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1
Every man, wherever he goes, is encompassed by a cloud of comforting convictions, which move with him like flies on a summer day.
   --Bertrand Russell, 1950

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Mandarini Author
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#2
6 years ago
finished my 2 tests in under 30 min thanks to you
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