Question $5$

Note: Please show detailed calculations and explanations. Answers without showing calculations$/$explanations$,$ will not receive credit.

The $3$ questions below are unrelated to each other

a$)$ Shauna is a $50\%$ partner in the SH Partnership. Shauna sells $(1)/(2)$ of her interest to Kara for $$60,000$ cash $($in other words, Shauna owns $50\%$ of the company and sells $25\%$ of the company to Kara$).$ Just before the sale, Shauna's basis in her entire partnership interest is $$150,000,$ including her $$60,000$ share of the partnership liabilities. SH$\text{'}$s assets on the sale date are as follows:

Basis FMV

Cash $ $80,000$ $ $80,000$

Inventory $$60,000$ $$180,000$

Land held for investment $$160,000$ $$100,000$

Total $ $300,000$ $ $360,000$

What is the amount and character of Shauna's gain or loss on the sale?

Hint: Note that we have a $$hot asset$$ involve in this transaction

b$)$ Riley is a $50$ percent partner in the RF Partnership and has an outside basis of $$56,000$ at the end of the year prior to any distributions. On December $31,$ Riley receives a proportionate operating distribution of $$6,000$ cash and a parcel of land with a $$14,000$ fair value and an $$8,000$ basis to RF$.$ What is the amount and character of Riley's recognized gain or loss and what is his basis in his partnership interest?

c$)$ Randolph is a $30$ percent partner in the RD Partnership. On January $1,$ RD distributes $$20,500$ cash and inventory with a fair value of $$55,000($inside basis of $$27,500)$ to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $$50,825.$ What is the amount and character of Randolph's gain or loss on the distribution?