Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a §754 election in place. Alix sells one-half of her interest (25 percent) to Michael Tomei for $41,500 cash. Just before the sale, Alix’s basis in her entire partnership interest is $88,800, including her $41,500 share of the partnership liabilities. Tralix’s assets on the sale date are as follows: Tax Basis FMV Cash $ 50,350 $ 50,350 Inventory 41,500 136,000 Land held for investment 85,750 54,600
Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a §754 election in place. Alix sells one-half of her interest (25 percent) to Michael Tomei for $41,500 cash. Just before the sale, Alix’s basis in her entire partnership interest is $88,800, including her $41,500 share of the partnership liabilities. Tralix’s assets on the sale date are as follows: Tax Basis FMV Cash $ 50,350 $ 50,350 Inventory 41,500 136,000 Land held for investment 85,750 54,600
Chapter21: Partnerships
Section: Chapter Questions
Problem 11BCRQ
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Question
Travis and Alix Weber are equal partners in the Tralix
| Tax Basis | FMV | ||||
| Cash | $ | 50,350 | $ | 50,350 | |
| Inventory | 41,500 | 136,000 | |||
| Land held for investment | 85,750 | 54,600 | |||
| Totals | $ | 177,600 | $ | 240,950 | |
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a. What is the amount and character of Alix’s recognized gain or loss on the sale?
multiple choice
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$23,625 of ordinary income and $5,775 of capital loss
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$5,775 of capital loss, $5,775 of ordinary income
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$5,775 of ordinary income and $23,625 of capital loss
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$35,700 of capital loss, $11,813 of ordinary income
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Neither gain nor loss recognized
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