Jackson is a 30% partner in the JJM Partnership when he sells his entire interest to Rhonda for $112,000 cash. At the time of the sale, Jackson's basis in JJM is $64,000. JJM does not have any debt or hot assets. What is Jackson's gain or loss on the sale of his interest?
A) $48,000 capital gain.
B) $48,000 ordinary income.
C) $24,000 capital gain and $24,000 ordinary income.
D) Gain or loss cannot be determined.
Correct Answer:
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