Deck 10: Special Partnership Issues

Question 1

Tenika has a $10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of $4,000 in money,plastic tubes held in inventory with a $3,000 basis to the partnership and an FMV of $3,375,and drip irrigation pipe held as inventory with a $6,000 basis to the partnership and an FMV of $5,000.What is Tenika's basis for the plastic tubes and drip irrigation pipe?

A)
B)
C)
D)

Answer 1

D
Explanation: D)
*$3,000 ÷ ($3,000 + $5,000) × 2,000 = 750
**$5,000 ÷ ($3,000 + $5,000) × 2,000 = 1,250

Question 2

Identify which of the following statements is true.

A) The basis for property distributed by a partnership cannot be increased above the carryover basis amount when it is received by a partner in a nonliquidating distribution.
B) A partner's partnership capital account balance cannot be less than zero.
C) The length of time a partner owns a partnership interest is relevant when determining the holding period for distributed property.
D) All of the above are false.

Answer 2

A

Question 3

If a distribution occurs within ________ years of the contribution date,in a nonliquidating distribution that does not qualify for Sec.751 treatment,the distribution event may trigger a precontribution gain or loss.

A) three
B) five
C) seven
D) unlimited

Answer 3

C

Question 4

In a current distribution,the partner's basis in the partnership interest is reduced by the amount of money received and by the partnership's bases in the distributed property.

Question 5

Becky has a $24,000 basis in her partnership interest.She receives a current distribution of $4,000 cash,unrealized receivables with a basis of $12,000 and an FMV of $16,000,and land held as an investment with a basis of $3,000 and an FMV of $8,000.The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.The basis of her partnership interest following the distribution is

A) $5,000.
B) $1,000.
C) $0.
D) ($4,000).

Question 6

A partner's holding period for property distributed as a current distribution begins on the date of distribution.

Question 7

Helmut contributed land with a basis of $5,000 and an FMV of $10,000 to the HG Partnership five years ago to acquire a 50% partnership interest.This year the land is distributed to another partner,Gail,when its FMV is $11,000.No other distributions have been made since Helmut became a partner.When the land is distributed to Gail,Helmut recognizes a gain of

A) $0.
B) $2,500.
C) $3,000.
D) $5,000.

Question 8

A partnership cannot recognize a gain or loss on a current distribution.

Question 9

John has a basis in his partnership interest of $30,000.He receives a current distribution of $6,000 cash,unrealized receivables (FMV $11,000,basis $10,000),inventory (FMV $8,000,basis $4,000),and investment land (FMV $7,000,basis $6,000).The partners' relative interest in the Sec.751 assets do not change as a result of the current distribution.His basis in the land is

A) $5,000.
B) $6,000.
C) $7,000.
D) $10,000.

Question 10

Susan contributed land with a basis of $6,000 and an FMV of $10,000 to the SH Partnership two years ago to acquire her partnership interest.This year,the land is distributed to Harry when its FMV is $11,000.No other distributions have been made since Susan became a partner.When the land is distributed,the partnership's basis in the land immediately before distribution is increased by

A) $0.
B) $1,000.
C) $4,000.
D) $5,000.

Question 11

The total bases of all distributed property in the partner's hands following a nonliquidating distribution is limited to

A) the partner's predistribution basis in his partnership interest.
B) the FMV of the property distributed.
C) the partnership's bases in the distributed property.
D) the predistribution FMV of the partner's partnership interest.

Question 12

Bart has a partnership interest with a $32,000 basis.He receives a current distribution of $6,000 cash,unrealized receivables (FMV $9,000,basis $10,000),inventory (FMV $8,000,basis $4,000),investment land (FMV $7,000,basis $4,000),and building (FMV $20,000,basis $8,000).No depreciation recapture applies with respect to the building.The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.Bart's basis in the building is

A) $3,000.
B) $4,000.
C) $6,000.
D) $8,000.

Question 13

If a partnership asset with a deferred precontribution gain is distributed within seven years of acquisition in a nonliquidating distribution to a partner who did not contribute the asset,the precontribution gain must be recognized by the contributing partner.

Question 14

Danielle has a basis in her partnership interest of $12,000.She receives a current distribution of $8,000 cash and equipment with a basis of $7,000.There is no potential gain under Sec.737.What is her basis in the equipment?

A) $0
B) $4,000
C) $7,000
D) none of the above

Question 15

Mirabelle contributed land with a $5,000 basis and a $9,000 FMV to MS Partnership four years ago.This year the land is distributed to Sergio,another partner in the partnership.At the time of distribution,the land had a $12,000 FMV.How much gain should Mirabelle and Sergio recognize?

A)
B)
C)
D)

Question 16

A new partner,Gary,contributes cash and assumes a share of partnership liabilities.Diane's capital,profits,and loss interest in the partnership is reduced by 5% due to the admission of Gary.The Sec.751 rules do not apply.Partnership liabilities at the time Gary is admitted are $200,000,and all of the liabilities are recourse debts for which the partners share the economic risk of loss in the same way they share partnership profits.Diane's basis in the partnership interest prior to Gary's admission is $5,000.Due to the admission of Gary,partner Diane has

A) no recognized gain or loss and a partnership interest basis of $10,000.
B) no recognized gain or loss.
C) a recognized gain of $5,000 and a partnership interest basis of zero.
D) a recognized gain of $5,000 and a partnership interest basis of $5,000.

Question 17

Identify which of the following statements is true.

A) If a partnership asset with a deferred precontribution gain is distributed in a nonliquidating distribution to the partner who contributed the asset, the precontribution gain must be recognized by the partner.
B) The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a nonliquidating distribution.
C) When a current distribution from a partnership reduces the basis of the partnership interest to zero, the partner's interest in the partnership is terminated.
D) All of the above are false.

Question 18

Tenika has a $10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of $4,000 in money,plastic tubes held in inventory with a $3,000 basis to the partnership and an FMV of $3,375,and drip irrigation pipe held as inventory with a $6,000 basis to the partnership and an FMV of $5,000.What is the basis in Tenika's hands of the distributed property?

A) $10,000
B) $6,000
C) $9,000
D) $10,125

Question 19

Mirabelle contributed land with a $5,000 basis and a $9,000 FMV to MS Partnership four years ago.This year the land is distributed to Sergio,another partner in the partnership.At the time of distribution,the land had a $12,000 FMV.What is the impact of the distribution on Mirabelle's partnership basis?

A) 0
B) $4,000 increase
C) $4,000 decrease
D) $7,000 increase

Question 20

Carlos has a basis in his partnership interest of $30,000.He receives a current distribution of $6,000 cash,unrealized receivables (FMV $11,000,basis $10,000),inventory (FMV $8,000,basis $4,000),land held as an investment (FMV $7,000,basis,$6,000),and building (FMV $21,000,basis $9,000).The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.Carlos's basis in the building is

A) $2,500.
B) $6,000.
C) $7,500.
D) $9,000.

Question 21

For purposes of Sec.751,inventory includes all of the following except

A) capital assets or 1231 property.
B) items held for sale in the ordinary course of business.
C) accounts receivable.
D) All of the above are inventory per Sec. 751.

Question 22

What is the definition of "substantially appreciated inventory"?

A) inventory with a FMV greater than its basis
B) inventory and unrealized receivables with a FMV greater than their basis
C) inventory with a FMV greater than 120% of its basis
D) inventory and unrealized receivables with a FMV greater than 120% of their basis

Question 23

The XYZ Partnership owns the following assets on December 31: A partner has a 20% interest with a basis of $6,000 in XYZ before receiving a liquidating distribution of $10,000 cash.XYZ Partnership has no liabilities.His recognized gain is

A) $4,000 capital gain.
B) $3,000 capital gain and $1,000 ordinary income.
C) $3,000 ordinary income.
D) $3,000 ordinary income and $1,000 capital gain.

Question 24

Jerry has a $50,000 basis for his interest in JJ Partnership before receiving a current distribution consisting of $8,000 in money,accounts receivable having a zero basis to the partnership,and land having a $28,000 basis to the partnership.What will Jerry's basis be in these assets?

Question 25

Jerry has a $50,000 basis for his interest in JJ Partnership before receiving a current distribution consisting of $8,000 in money,accounts receivable having a zero basis to the partnership,and land having a $28,000 basis to the partnership.What is Jerry's basis in his partnership interest after the distribution?

Question 26

For Sec.751 purposes,"substantially appreciated inventory" means property held for sale to customers whose market value exceeds its adjusted basis.

Question 27

Identify which of the following statements is true.

A) The depreciation recapture potential for a Sec. 1245 property is not included in the definition of a Sec. 751 asset.
B) For Sec. 751 purposes, "substantially appreciated inventory" means property held for sale to customers whose market value exceeds its adjusted basis.
C) Inventory for Sec. 751 purposes includes all property except cash, capital assets, and Sec. 1231 assets.
D) All of the above are false.

Question 28

The AB Partnership has a machine with an FMV of $25,000 and a basis of $20,000.The partnership has taken an $8,000 depreciation on the machine.The unrealized receivable related to the machine is

A) $0.
B) $5,000.
C) $8,000.
D) $20,000.

Question 29

Under Sec.751,unrealized receivables include potential Section 1245 or 1250 recapture on the partnership's depreciable property.

Question 30

The XYZ Partnership owns the following assets on December 31: By how much must XYZ reduce its unrealized receivables to avoid meeting the substantially appreciated inventory test?

A) $10,000
B) $14,000
C) $15,000
D) No amount of reduction of unrealized receivables will affect meeting the substantially appreciated inventory test.

Question 31

Last year,Cara contributed investment land with an FMV of $24,000 and basis of $18,000 to the CDE Partnership.CDE made no distributions during last year,and Cara's basis in her partnership interest on December 31 of last year was $28,000.On January 1 of this year,the partnership distributed cash of $30,000 to Cara and distributed the land contributed by Cara to another partner,David.On the distribution date,the land had a $27,000 FMV.Assume the CDE Partnership reported no profit or loss this year.How much gain (if any)must Cara recognize as a result of the distributions? What is her basis in the partnership after the distributions?

Question 32

On November 30,Teri received a current distribution of cash of $4,000,marketable securities with a basis of $24,000 and an FMV of $30,000,and inventory with a basis of $2,000 and an FMV of $6,000.Prior to the distribution,Teri's basis in her interest in the partnership was $30,000.(There is no Sec.751 exchange as a result of the distribution.)How much gain (if any)must Teri recognize as a result of the distribution?

Question 33

Two years ago,Tom contributed investment land with a basis of $50,000 and an FMV of $62,000 to the RST Partnership.This year,Tom has a basis in his partnership interest of $53,000 when he receives a current distribution of $14,000 cash and inventory with a basis of $35,000 and an FMV of $52,000.(There is no Sec.751 exchange in connection with the inventory distribution.)The partnership continues to hold the land Tom contributed.How much gain (if any)must Tom recognize as a result of this distribution?

Question 34

Identify which of the following statements is true.

A) If a partner sells property received in a partnership distribution for a gain and the property was inventory in the hands of the distributing partnership, the partner will always recognize ordinary income.
B) The primary purpose of Sec. 751 is to prevent partnerships from converting capital gains into ordinary income.
C) Unrealized receivables include rights to payments on the sale of a capital asset.
D) All of the above are false.

Question 35

The TK Partnership has two assets: $20,000 cash and a machine having a $28,000 basis and a $40,000 FMV.The partnership has claimed $16,000 in depreciation on the machine since its purchase.If the machine is sold for its FMV,would TK Partnership have an unrealized receivable item?

Question 36

The ABC Partnership owns the following assets on December 31. The indication that ABC owns substantially appreciated inventory is

A) the total FMV of all assets except cash is greater than their total basis.
B) the FMV of all assets except land is $90,000 while their bases is $40,000.
C) the FMV of the inventory is $30,000 while its adjusted basis is $20,000.
D) the FMV of the inventory and unrealized receivables is $70,000 while their adjusted bases is $20,000.

Question 37

When Rachel's basis in her interest in the RST Partnership is $40,000,she receives a current distribution of office equipment.The equipment has an FMV of $60,000 and a basis of $50,000.Rachel will not use the office equipment in a business activity.What tax issues should Rachel consider with respect to the distribution?

Question 38

The definition of "inventory" for purposes of Sec.751 includes

A) cash.
B) land held for investment.
C) marketable securities not held by dealers.
D) depreciation recapture potential on Sec. 1231 assets.

Question 39

The Internal Revenue Code includes which of the following assets in the definition of Sec.751 properties?

A) inventory, which is substantially appreciated
B) cash
C) capital assets
D) Sec. 1231 assets

Question 40

The definition of "unrealized receivable" does not include the

A) right to payment for services performed by a cash-basis taxpayer.
B) recapture potential on Sec. 1245 property.
C) recapture potential on Sec. 1250 property.
D) right to payment for services performed by an accrual-basis taxpayer.

Question 41

A partner can recognize gain,but not loss,on a liquidating distribution.

Question 42

Eicho's interest in the DPQ Partnership is terminated when her basis in the partnership is $70,000.She receives a liquidating distribution of $20,000 cash and inventory with a $24,000 basis and a $40,000 FMV.What is her gain or loss,and what is her basis in the inventory received?

Question 43

What is included in the definition of unrealized receivables?

Question 44

The Tandy Partnership owns the following assets on December 31:
Is the partnership's inventory considered to be substantially appreciated for purposes of Sec.751? Show your work.

Question 45

A partner's holding period for a partnership interest is never considered when determining the holding period for property distributed in a liquidating distribution.

Question 46

Kenya sells her 20% partnership interest having a $28,000 basis to Ebony for $40,000 cash.At the time of the sale,the partnership has no liabilities and its assets are as follows: Kenya and Ebony have no agreement concerning the allocation of the sales price.Ordinary income recognized by Kenya as a result of the sale is

A) $6,000.
B) $12,000.
C) $14,000.
D) $16,000.

Question 47

Ten years ago,Latesha acquired a one-third interest in Dana Associates,a partnership,for $26,000 cash.This year,Latesha's entire interest in the partnership is liquidated when her basis is $24,000.Dana's assets consist of the following: cash,$20,000; inventory with a basis of $46,000 and an FMV of $40,000.Dana has no liabilities.Latesha receives the cash of $20,000 in liquidation of her entire interest.What is Latesha's recognized loss on the liquidation of her interest in Dana?

A) $0
B) $4,000 long-term capital loss
C) $4,000 short-term capital loss and $2,000 ordinary loss
D) $4,000 long-term capital loss and $2,000 ordinary loss

Question 48

Adnan had an adjusted basis of $11,000 for his interest in the Adnan and Donnell Partnership on December 31.On this date,Adnan received from the partnership,in complete liquidation of his interest,$10,000 cash and land with a $2,000 basis to the partnership and a $3,000 FMV.What is Adnan's basis for the land distributed to him?

Question 49

Ed receives a $20,000 cash distribution from the EV Partnership,which reduces his partnership interest from one-third to one-fourth.The EV Partnership is a general partnership that uses the cash method of accounting and has substantial liabilities.EV's inventory has appreciated substantially since it was purchased.What issues should Ed consider with regard to the distribution?

Question 50

Identify which of the following statements is true.

A) When unrealized receivables are distributed in a liquidating distribution, the basis of the receivables will be increased.
B) The bases of unrealized receivables and inventory distributed by a partnership in liquidation of a partnership interest are never increased above their bases in the hands of the partnership.
C) The basis of the partnership interest is apportioned between all of the assets received in a liquidating distribution based on the relative FMVs of the assets.
D) All of the above are false.

Question 51

Before receiving a liquidating distribution,Kathy's basis in her interest in the KLM Partnership is $30,000.The distribution consists of $5,000 in money,inventory having a $1,000 basis to the partnership and a $2,000 FMV,and two parcels of undeveloped land (not held as inventory)having basis of $3,000 and $9,000 to the partnership with FMVs of $5,000 and $12,000,respectively.What is Kathy's basis in each parcel of land?

A)
B)
C)
D)

Question 52

Identify which of the following statements is true.

A) On December 31 of the current year, Max Curcio's adjusted basis for his interest in the Maduro & Motta Partnership is $36,000. Maduro & Motta distributes cash of $6,000 and a parcel of land held as an investment to Curcio in liquidation of his entire interest in the partnership. The land has an adjusted basis of $18,000 to the partnership and an FMV of $42,000. Curcio's basis in the land is $18,000.
B) Jake has a basis in his partnership interest of $40,000 before receiving a liquidating distribution of $5,000 cash, inventory with a basis of $4,000 and an FMV of $5,000, and land with a basis of $3,000 and an FMV of $6,000. Jake will receive no further distributions. He can recognize a loss of $28,000 at the time the liquidating distribution is received.
C) A partner's holding period for a partnership interest is never considered when determining the holding period for property distributed in a liquidating distribution.
D) All of the above are false.

Question 53

The CHS Partnership's balance sheet presented below is prepared on a cash basis at September 30 of the current year.
Cindy withdraws from the partnership under an agreement whereby she takes one-third of each of the three assets and assumes $10,000 of the notes payable.Her basis for the partnership interest before any distribution is $25,000.What gain/loss should she report for tax purposes?

Question 54

Identify which of the following statements is false.

A) On June 30 of the current year, James Roe sells his interest in the Roe & Doe Partnership for $30,000. Roe's adjusted basis in Roe & Doe at June 30 is $7,500 before apportionment of any partnership income for the current year. The Roe & Doe Partnership uses the calendar year as its tax year and has no liabilities on June 30. Roe's distributive share of partnership income up to June 30 is $22,500. Roe acquired his interest in the partnership five years ago. Roe will have a long-term capital gain on the sale of his interest of $22,500.
B) Section 751 assets include all inventory and all unrealized receivables in a sale or exchange situation.
C) When a partnership interest is sold, the buyer and seller can allocate the sale price among the Sec. 751 assets and non-Sec. 751 assets in any reasonable manner.
D) Statements B and C are true.

Question 55

Ted King's basis for his interest in the Troy Partnership is $24,000.In complete liquidation of his interest,King receives cash of $4,000 and real property (not a Sec.751 asset)having an FMV of $40,000.Troy's adjusted basis for this realty is $15,000.Section 736 does not apply.King's basis for this realty is

A) $15,000.
B) $20,000.
C) $36,000.
D) $40,000.

Question 56

Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash.At the time of the sale,the partnership has no liabilities and its assets are as follows: The receivables and inventory are Sec.751 assets.There is no agreement concerning the allocation of the sales price.Steve must recognize

A) no gain or loss.
B) $12,000 ordinary income.
C) $12,000 capital gain.
D) $14,000 ordinary income and $2,000 capital loss.

Question 57

Derrick's interest in the DEF Partnership is liquidated when his basis in the interest is $30,000.He receives a liquidating distribution of $20,000 cash and inventory with a basis of $8,000 and an FMV of $30,000.Derrick will recognize

A) no gain or loss.
B) $2,000 capital loss.
C) $2,000 ordinary loss.
D) $10,000 capital loss and $20,000 ordinary loss.

Question 58

The sale of a partnership interest always results in capital gain or loss rather than ordinary income.

Question 59

Do most distributions made by a partnership require a Sec.751 calculation?

Question 60

Identify which of the following statements is true.

A) A liquidating distribution that terminates a partnership interest cannot include more than one distribution.
B) A partnership with a large amount of unrealized receivables and substantially appreciated inventory items liquidated and distributed all of its assets in kind to each partner in proportion to their partnership interests. Each partner will report ordinary income at the time these assets are received equal to their FMV.
C) The rule for recognizing gain on a liquidating distribution is the same rule that is used for a current distribution.
D) All of the above are false.

Question 61

A partnership terminates for tax purposes

A) only when it terminates under local partnership law.
B) when at least 50% of the total interest in partnership capital and profits changes hands by sale or exchange within twelve consecutive months.
C) when the sale of partnership assets is made only to an outsider(s) and not to an existing partner(s).
D) when a partnership tax return (Form 1065) ceases to be filed by the partnership.

Question 62

Joshua is a 40% partner in the XY Partnership when he sells his entire interest to Stanley for $60,000 cash.At the time of the sale,Joshua's basis is $36,000,which includes his $10,000 share of partnership liabilities.The partnership has no Sec.751 assets.Calculate Joshua's gain or loss on the sale.

Question 63

Under the check-the-box rules,an LLC with more than one member is taxed as a partnership unless it elects to be taxed as a corporation.

Question 64

Tony sells his one-fourth interest in the WindyCity Partnership to Bill for $100,000 cash when the partnership's assets are as follows:
The partnership has no liabilities on the sale date.Tony's basis in his partnership interest on the date of the sale is $60,000.What is the allocation of Tony's gain to the assets received?

Question 65

Identify which of the following statements is true.

A) Under the check-the-box rules, an LLC with more than one member is taxed as a corporation unless it elects to be taxed as a partnership.
B) The partnership's tax year closes with respect to a partner whose interest is transferred by gift.
C) An LLC has been taxed as a partnership for five years. Under the check-the-box rules, the LLC makes a timely election in 2009 to be taxed as a C corporation. The election of C corporation status is permitted and results in the LLC's assets being transferred from a partnership to a C corporation under the federal income tax rules.
D) All of the above are false.

Question 66

If a partner dies,his or her tax year closes

A) on the date of death.
B) on the day after death.
C) on the day before death.
D) on some other date.

Question 67

On December 31,Kate receives a $28,000 liquidating distribution from the KLM Partnership.On that date,Kate's basis in her limited partnership interest is $18,000 (which,of course,includes her share of partnership liabilities).The other partners assume her $6,000 share of liabilities.Just prior to the distribution,the partnership has the following balance sheet.Kate is leaving the partnership but the partnership is continuing.
What is the amount and character of the gain that Kate must recognize on the liquidating distribution?

Question 68

For tax purposes,a partner who receives retirement payments ceases to be regarded as a partner

A) on the last day of the taxable year in which the partner retires.
B) on the last day of the month in which the partner retires.
C) on the day on which the partner retires.
D) only after the partner's last payment is received.

Question 69

The HMS Partnership,a cash method of accounting entity,has the following balance sheet at December 31 of last year:
Sam,who has a one-third interest in profits,losses,and liabilities,sells his partnership interest to Beverly,for $77,000 cash on January 1 of this year.Sam's basis in his partnership interest (which,of course,includes a share of partnership liabilities)at the time of the sale was $17,000.In addition,Beverly assumes Sam's share of the partnership liabilities.What is the amount and character of the gain that Sam will recognize from this sale?

Question 70

What conditions are required for a partner to recognize a loss upon receipt of a distribution from a partnership?

Question 71

Eicho's interest in the DPQ Partnership is terminated when her basis in the partnership is $70,000.She receives a liquidating distribution of $20,000 cash and inventory with a $24,000 basis and a $40,000 FMV.She also receives,as part of the distribution,a desk that has a $100 basis and a $200 FMV to the partnership.What is her gain or loss,and what is her basis in the items received?

Question 72

When a retiring partner receives payments that exceed the value of that partner's partnership property,the excess payment is a guaranteed payment.

Question 73

David sells his one-third partnership interest to Diana for $60,000 when his basis in the partnership interest is $48,000.On the date of sale,the partnership has no liabilities and the following assets:
The building is depreciated on a straight-line basis.What tax issues should David and Diana consider with respect to the sale transaction?

Question 74

On December 31,Kate sells her 20% interest (with a basis of $18,000 which,of course,includes a share of partnership liabilities)in the KLM Partnership to Karl for $27,000 cash plus assumption of her $6,000 share of liabilities.On that date,the partnership has the following balance sheet:
What are the amount and character of the gain that Kate must recognize on the sale?

Question 75

Can a partner recognize both a gain and a loss on the sale of a partnership interest? If so,under what conditions?

Question 76

If a partnership chooses to form an LLC,under the check-the-box rules,and assuming no elections are made,the entity will be taxed as

A) a partnership if it has more than one member.
B) an S corporation.
C) a C corporation.
D) Unable to determine from the facts presented.

Question 77

Identify which of the following statements is true.

A) John Albin is a retired partner of Brill & Crum, a personal service partnership. Albin has not rendered any services to Brill & Crum since his retirement six years ago. Under the provisions of Albin's retirement agreement, Brill & Crum is obligated to pay Albin 10% of the partnership's net income each year through the end of the current year. In compliance with the agreement, Brill & Crum pay Albin $25,000 in the current year. Albin should treat this $25,000 as a long-term capital gain.
B) An exchange of partnership interests in different partnerships qualifies under the like-kind exchange rules.
C) The payment for partnership property to a retiring partner is not deductible by the partnership and often not income to the retiring partner.
D) All of the above are false.

Question 78

Tony sells his one-fourth interest in the WindyCity Partnership to Bill for $100,000 cash when the partnership's assets are as follows:
The partnership has no liabilities on the sale date.Tony's basis in his partnership interest on the date of the sale is $60,000.What is the amount of gain realized by Tony on the sale of his partnership interest?

Question 79

What is the character of the gain/loss on the sale of a partnership interest?

Question 80

Tony sells his one-fourth interest in the WindyCity Partnership to Bill for $100,000 cash when the partnership's assets are as follows:
The partnership has no liabilities on the sale date.Tony's basis in his partnership interest on the date of the sale is $60,000.What are the amount and character of Tony's gain?