Joan is a 1/3 partner in the PDJ Partnership.PDJ Partnership uses the proration method to allocate income and losses to partners with varying interests.On May 1,Joan sells her interest to Freddie for a cash payment of $75,000.On January 1,Joan's basis in PDJ is $57,000.PDJ generates $60,000 of ordinary income and $9,000 of tax-exempt income during the first four months of the year.PDJ has the following assets and no liabilities at the sale date:
$\begin{array} { l r c }
& \text { Basis } & \text { Fair Market Value } \
\text { Cash } & \$ 45,000 & \$ 45,000 \
\text { Lard held For irvestrient } & \$ 45,000 & \$ 90,000
\end{array}$ What is the amount and character of Joan's gain or loss on the sale?

Question

Joan is a 1/3 partner in the PDJ Partnership.PDJ Partnership uses the proration method to allocate income and losses to partners with varying interests.On May 1,Joan sells her interest to Freddie for a cash payment of $75,000.On January 1,Joan's basis in PDJ is $57,000.PDJ generates $60,000 of ordinary income and $9,000 of tax-exempt income during the first four months of the year.PDJ has the following assets and no liabilities at the sale date:
 $\begin{array} { l r c } 
& \text { Basis } & \text { Fair Market Value } \
\text { Cash } & \$ 45,000 & \$ 45,000 \
\text { Lard held For irvestrient } & \$ 45,000 & \$ 90,000
\end{array}$ What is the amount and character of Joan's gain or loss on the sale?

Quizplus · Accepted Answer

The Answer of Joan is a 1/3 partner in the PDJ Partnership.PDJ Partnership uses the proration method to allocate income and losses to partners with varying interests.On May 1,Joan sells her interest to Freddie for a cash payment of $75,000.On January 1,Joan's basis in PDJ is $57,000.PDJ generates $60,000 of ordinary income and $9,000 of tax-exempt income during the first four months of the year.PDJ has the following assets and no liabilities at the sale date:
 $\begin{array} { l r c } 
& \text { Basis } & \text { Fair Market Value } \
\text { Cash } & \$ 45,000 & \$ 45,000 \
\text { Lard held For irvestrient } & \$ 45,000 & \$ 90,000
\end{array}$ What is the amount and character of Joan's gain or loss on the sale?

Joan Is a 1/3 Partner in the PDJ Partnership What Is the Amount and Character of Joan's Gain or Uses