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

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?

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The Answer of 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?

On December 31,Kate Sells Her 20% Interest (With a Basis