Barry Owns a 50 Percent Interest in B&B Interests,a Partnership

question 53

Multiple Choice

Barry owns a 50 percent interest in B&B Interests,a partnership.His brother,Benny,owns a 35 percent interest in that same partnership,and the remaining 15 percent is owned by an unrelated individual.During 2013,Barry sells a rental property with a basis of $60,000 to B&B Interests for $100,000.The partnership intends to hold the rental as inventory for resale.What is the amount and nature of Barry's gain or loss on this transaction?

• A)$40,000 long-term capital loss
• B)$0 gain or loss
• C)$40,000 long-term capital gain
• D)$40,000 ordinary income
• E)None of the above

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Definitions:

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