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10- Partner S has been a one-third partner in the STU partnership for 12 years and has a basis in her partnership interest of $120,000. The...

10- Partner S has been a one-third partner in the STU partnership for 12 years and has a basis in her partnership interest of $120,000. The partnership owns the following assets:


Adjust basis FMV

Cash $130,000 $130,000

Inventory $80,000 $110,000

Land $80,000 $95,000

Collectibles $70,000 $85,000

S sells her partnership interest to W for $140,000. Which response correctly indicates the character of her gain from the sale?

 

$20,000 15% long-term capital gain (LTCG).

 

$10,000 ordinary income and $10,000 15% long-term capital gain.

 

$10,000 ordinary income, $5,000 15% LTCG, and $5,000 28% LTCG.

 

$20,000 ordinary income.

Top Answer

S will report a $10,000... View the full answer

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