Jordan and his two brothers are equal owners in Taupe Partnership.If Jordan sells business property (basis of
$230,000; fair market value of $280,000) to Taupe for $280,000, he must recognize the $50,000 realized gain.

Question

Quizplus · Accepted Answer

Jordan must recognize the $50,000 gain because the sale is to a partnership in which he is not a controlling partner (i.e., he owns less than 50%), and thus the transaction is treated as a sale to an unrelated party for tax purposes.

Jordan and His Two Brothers Are Equal Owners in Taupe