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: $\begin{array}{lcc}
\text { Assets } & \text { Basis } & \text { FMV } \
\text { Cash } & \$ 40,000 & \$ 40,000\
\text { Inventory } & 18,000 & 27,000 \
\text { Building } & 75,000 & 102,000 \
\text { Land } & 11,000 & 11,000
\end{array}$ The building is depreciated on a straight- line basis. What tax issues should David and Diana consider with resp to the sale transaction?

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The Answer of 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: $\begin{array}{lcc}
\text { Assets } & \text { Basis } & \text { FMV } \
\text { Cash } & \$ 40,000 & \$ 40,000\
\text { Inventory } & 18,000 & 27,000 \
\text { Building } & 75,000 & 102,000 \
\text { Land } & 11,000 & 11,000
\end{array}$ The building is depreciated on a straight- line basis. What tax issues should David and Diana consider with resp to the sale transaction?

David Sells His One- Third Partnership Interest to Diana for $60,000