partnerspiciest. 10-44 Sale of a Partnership Interest. Records of a CPA partnership show the following: Cash Accounts receivable. Section 1231 assets. Accumulated depreciation. Liabilities. Partners' capital... Inside Basis Fair Market Value $ 8,000 0 130,000 $ 8,000 40,000 100,000 (50,000) $ 88,000 $148,000 $ 28,000 $ 28,000 60,000 120,000 $88,000 $148,000 The 1231 assets have potential 1245 and 1250 recapture of $4,000. M, a 25% partner, has an outside basis in his partnership interest of $22,000 (including 25% of partnership liabilities). M sells the 25% interest to J for $30,000 cash. a. What is the amount and character of M's recognized gain on sale? b. How would your answers differ if M's outside basis in his partnership interest had been $28,000?