Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a 754
Question:
Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a §754 election in place. Alix sells one-half of her interest (25 percent) to Michael Tomei for $34,000 cash. Just before the sale, Alix’s basis in her entire partnership interest is $79,800, including her $34,000 share of the partnership liabilities. Tralix’s assets on the sale date are as follows:
Tax Basis FMV
Cash $ 43,600 $ 43,600
Inventory 34,000 106,000
Land held for investment 82,000 51,600
Totals $ 159,600 $ 201,200
What is the amount and character of Alix’s recognized gain or loss on the sale? $18,000 of ordinary income and $6,900 of capital loss $6,900 of capital loss, $6,900 of ordinary income $6,900 of ordinary income and $18,000 of capital loss $22,200 of capital loss, $9,000 of ordinary income Neither gain nor loss recognized
a). What is Alix’s basis in her remaining partnership interest?
b). What is Michael’s basis in his partnership interest?
c). Does the sale on a partnership basis have any effect on the assets? Yes or No