2. On December 31 of the current year, after receipt of his share of partner sold his interest in a limited partnership for $30,000 cash and relief of all partnership liabilities. Immediately before the transaction, the adjusted basis of Clark's partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. The partnership has no unrealized receivables or substantially appreciated inventory (ie., no hot assets). What is Clark's gain or loss on the sale of his partnership interest?
2. On December 31 of the current year, after receipt of his share of partner sold his interest in a limited partnership for $30,000 cash and relief of all partnership liabilities. Immediately before the transaction, the adjusted basis of Clark's partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. The partnership has no unrealized receivables or substantially appreciated inventory (ie., no hot assets). What is Clark's gain or loss on the sale of his partnership interest?
Chapter21: Partnerships
Section: Chapter Questions
Problem 11BCRQ
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Question
Transcribed Image Text:2. On December 31 of the current year, after receipt of his share of partner
sold his interest in a limited partnership for $30,000 cash and relief of all partnership liabilities.
Immediately before the transaction, the adjusted basis of Clark's partnership interest was
$40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of
$25,000. The partnership has no unrealized receivables or substantially appreciated inventory
(ie., no hot assets). What is Clark's gain or loss on the sale of his partnership interest?
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