Allison, Keesha, and Steven each own equal interests in KAS Partnership, a calendar-year-end, cash-method entity....
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Accounting
Allison, Keesha, and Steven each own equal interests in KAS Partnership, a calendar-year-end, cash-method entity. On January 1 of the current year, Stevens basis in his partnership interest is $31,500. During January and February, the partnership generates $35,940 of ordinary income and $5,904 of tax-exempt income. On March 1, Steven sells his partnership interest to Juan for a cash payment of $54,900. The partnership has the following assets and no liabilities at the sale date:
Tax Basis
FMV
Cash
$
39,000
$
39,000
Land held for investment
39,000
78,000
Totals
$
78,000
$
117,000
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