Good Times is a general partnership with the following balance sheets: ...
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Accounting
Good Times is a general partnership with the following balance sheets:
Basis
FMV
Cash
$15,000
$15,000
Capital assets
35,000
75,000
Land
85,000
240,000
Totals
$135,000
$330,000
Recourse liabilities
$90,000
$90,000
Capital, Claire
15,000
80,000
Capital, Lorie
15,000
80,000
Capital, Tom
15,000
80,000
Totals
$135,000
$330,000
The partners share equally in profits, losses and capital. Tom is negotiating to sell his interest in the partnership to an unrelated buyer. Assume the buyer is willing to pay $120,000 cash for half Toms interest.
What will be the amount realized by Tom on the sale?
What is the tax basis of the interest to be sold by Tom?
How much gain will Tom recognize on the sale?
What will be the buyers tax basis in the newly acquired interest?
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