On December 31, 2014, after receipts of his share of partnership income, Clark sold his interest in a limited partnership for $30,000 cash and relief of all liabilities. On that date, the adjusted basis of Clark's partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. The partnership has no unrealized receivables or appreciated inventory. What is Clark's gain or loss on the sale of his partnership interest?
a. Ordinary loss of $10,000.
b. Ordinary gain of $15,000.
c. Capital loss of $10,000
d. Capital gain of $15,000
Answer: D
Tax
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- Income in respect of a cash-basis decedent
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