On December 31 of the current year, after receipt of his share of partnership income, Fox sold
Question:
On December 31 of the current year, after receipt of his share of partnership income, Fox sold his interest in a limited partnership for $50,000 cash plus relief of all liabilities. On that date, the adjusted basis of Fox’s partnership interest was $60,000, consisting of his capital account of $35,000 and his share of the partnership liabilities of $25,000. The partnership has no unrealized receivables or substantially appreciated inventory. What is Fox’s gain or loss on the sale of his partnership interest?
a. Ordinary loss of $10,000
b. Ordinary gain of $15,000
c. Capital loss of $10,000
d. Capital gain of $15,000
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
South Western Federal Taxation 2020 Corporations, Partnerships, Estates And Trusts
ISBN: 9780357109168
43rd Edition
Authors: William A. Raabe, James C. Young, William H. Hoffman, Annette Nellen, David M. Maloney