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Steve Sells His 20% Partnership Interest Having a $28,000 Basis

Question 88

Multiple Choice

Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash.At the time of the sale,the partnership has no liabilities and its assets are as follows: Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash.At the time of the sale,the partnership has no liabilities and its assets are as follows: The receivables and inventory are Sec.751 assets.There is no agreement concerning the allocation of the sales price.Steve must recognize A) no gain or loss. B) $12,000 ordinary income. C) $12,000 capital gain. D) $14,000 ordinary income and $2,000 capital loss. The receivables and inventory are Sec.751 assets.There is no agreement concerning the allocation of the sales price.Steve must recognize


A) no gain or loss.
B) $12,000 ordinary income.
C) $12,000 capital gain.
D) $14,000 ordinary income and $2,000 capital loss.

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