Scott sells his one-third partnership interest to Sally for $43,000 when his basis in the partnership interest is $33,000. On the date of sale, the partnership has no liabilities and the following assets:

The partnership has claimed $5,400 of straight-line depreciation on the building. What tax issues should Scott and Sally consider with respect to the sale transaction?

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Assets Basis FMV Cash S30,000 S30,000 nventory 12,000 21,000 Building 45,000 60.000 Land 12,000 18,000