Victor is a one-third partner in the VRX Partnership,with an outside basis of $156,000 on January 1.Victor sells his partnership interest to Raj on January 1 for $200,000 cash.The VRX Partnership has the following assets and no liabilities as of January 1:
The equipment was purchased for $360,000 and the partnership has taken $90,000 of depreciation.The stock was purchased seven years ago.What is the amount and character of Victor's gain or loss on the sale of his partnership interest?
Definitions:
Positive Economic Statement
An objective statement that can be tested or validated through data, as opposed to a normative statement which is subjective and opinion-based.
Normative Statement
A statement that expresses a value judgment or opinion, suggesting how things should be rather than stating factual evidence.
Moral Judgment
The process of determining the rightness or wrongness of actions, often based on ethical principles.
Opportunity Costs
The cost of missing out on the top alternative by deciding on another option.
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