Green, Black and Blue each own one third of Color partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service company whose sole assets are $600 in accounts receivable. The partnership has no liabilities. Green sells his partnership interest to Purple for its fair market value $200.

a) How much, if any, gain or loss does Green recognize on the sale of the partnership interest?

b) If there is a recognized gain or loss what is the character of it?

c) What is Purple’s basis in the partnership?

d) Assume no elections are made at the partnership level. When the receivables are collected how much income is allocated to Purple?