Clay owned 60% of the CAP Partnership and sold one-half of his interest (30%) to Steve for $75,000 cash. Before the sale, Clay?s basis in his entire partnership interest was $168,000 including his $30,000 share of partnership liabilities and his share of income up to the sale date. Partnership assets on the sale date were Assets Partnership?s Basis FMV:

Answer all question and show work

1. The amount and character of Clay?s recognized gain or loss on the sale.

2. Clay?s remaining basis in the partnership.

3. Steve?s basis in the partnership.

Transcribed Image Text:

Cash Inventory Land Total $50,000 30,000 200,000 $280,000 $50,000 60,000 190,000 $300,000 Cash Inventory Land Total $50,000 30,000 200,000 $280,000 $50,000 60,000 190,000 $300,000

Answer rating: 100% (QA)

The results of the sale are determined as follows Application of step 1 yields the following gain on ... View the full answer