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Sara Smiles is tired and wants to leave the glamour's world of hand modeling for a life as a monastic nun. Sara sells her 10%
- Sara Smiles is tired and wants to leave the glamour's world of hand modeling for a life as a monastic nun. Sara sells her 10% share in We Got Part Modeling Agency for $500,000 plus release from partnership debt of $200,000.
- What is Sara's recognized gain or loss from the sale?
- $500,000 (cash received)
- + 200,000 (debt relief)
- = $700,000 (Amount Realized)
- - $569,000 (Basis)
- = $131,000 (Capital Gain)-That's the answer but where did $569,000(Basis) come from?
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Accounting Chapters 14-26
Authors: Carl Warren
27th Edition
1337272116, 978-1337272117
