Question
Victor is a one-third partner in the VRX Partnership, with an outside basis of $156,000 on January 1. Victor sells his partnership interest to Raj
Victor is a one-third partner in the VRX Partnership, with an outside basis of $156,000 on January 1. Victor sells his partnership interest to Raj on January 1 for $200,000 cash. The VRX Partnership has the following assets and no liabilities as of January 1:
| Basis | FMV | |
|---|---|---|
| Cash | $ 27,000 | $ 27,000 |
| Accounts receivable | 0 | 18,000 |
| Inventory | 103,500 | 121,500 |
| Equipment | 270,000 | 337,500 |
| Stock investment | 67,500 | 96,000 |
| Totals | $ 468,000 | $ 600,000 |
The equipment was purchased for $360,000 and the partnership has taken $90,000 of depreciation. The stock was purchased seven years ago. What is the amount and character of Victor's gain or loss on the sale of his partnership interest?
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Government and Not for Profit Accounting Concepts and Practices
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
7th edition
1118983270, 978-1119175025, 111917502X, 978-1119175001, 978-1118983270
