On July 1,Joseph,a 10% Owner,sells His Interest in ABC Partnership

question 36

Multiple Choice

On July 1,Joseph,a 10% owner,sells his interest in ABC Partnership to Andy,an outsider,for $165,000 cash and the release from $20,000 of partnership liabilities.Joseph's partnership interest at the beginning of the year was $120,000.The partnership earned income through June 30 of $100,000.Joseph's share of partnership liabilities increased by $5,000 from January 1 to June 30.What are the tax consequences to Joseph on the sale of his partnership interest (assume the partnership does not hold any inventory or unrealized receivables) ?

• A)$45,000 capital gain
• B)$50,000 capital gain
• C)$55,000 capital gain
• D)$65,000 capital gain

---

Definitions:

Differential Emotions

A theory that suggests humans experience a set of basic emotions with unique and distinctive patterns of physiological arousal.

Universal Basic Emotions

refers to a theory suggesting that there are several basic emotions that are universally recognized and experienced by humans regardless of culture.

Psychologists

Professionals who study mental processes and behavior, often helping individuals cope with their emotions, thought patterns, and interactions.

Differential Emotions Theory

The view that basic emotions are innate and emerge in their adult form either at birth or on a biologically determined timetable.