27

At the end of last year, Cynthia, a 20 percent partner in the five-person CYG partnership, has an outside basis of $33,000, including her $19,500 share of CYG debt. On January 1 of the current year, Cynthia sells her partnership interest to Roger for a cash payment of $24,000 and the assumption of her share of CYG's debt. CYG has no hot assets. What is the amount and character of Cynthia's recognized gain or loss on the sale? Multiple Choice $9,000 capital loss $4,500 ordinary income $10,500 capital gain $9,000 ordinary loss Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with an FMV of $20,000. His adjusted basis in the building was $10,000. In addition, the building was encumbered with a $6,000 nonrecourse mortgage that XYZ LP assumed at the time the property was contributed, What is Gerald's outside basis immediately after his contribution? Multiple Choice $14,000 $6,000 $4,000 $16,000