Barry owns a 50 percent interest in B&B Interests, a partnership. His brother, Benny, owns a 35 percent interest in that same partnership, and the remaining 15 percent is owned by an unrelated individual. During the current year, Barry sells a rental property with a basis of $60,000 to B&B Interests for $100,000. The partnership intends to hold the rental as inventory for resale. What is the amount and nature of Barry's gain or loss on this transaction?

A)$40,000 long-term capital loss

B)$0 gain or loss

C)$40,000 long-term capital gain

D)$40,000 ordinary income

E)None of the above

Answer rating: 100% (QA)

Correct option is d 40000 ordina... View the full answer