David owns a 60% interest in the DDD Partnership, a general partnership, which he sells to the

Question:

David owns a 60% interest in the DDD a general which he sells to the two remaining partners—Drew and Dana. The three partners have agreed that David will receive $150,000 in cash from the sale. David’s basis in the interest before the sale is $120,000, which includes his $30,000 share of recourse liabilities. The has assets with a $300,000 FMV and a $200,000 adjusted basis. What issues should David, Drew, and Dana consider before this sale takes place?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...