The SSC Partnership Balance Sheet Includes the Following Assets on December

question 35

Multiple Choice

The SSC Partnership balance sheet includes the following assets on December 31 of the current year: $$\begin{array} { | l | r | r | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 180,000 & \$ 180,000 \\\hline \text { Accounts receivable } & - 0 - & 60,000 \\\hline \text { Land } & 90,000 & 120,000 \\\hline \text { Total } & \underline { \$ 270,000 } & \$ 360,000 \\\hline\end{array}$$ Susan, a 1/3 partner, has an adjusted basis of $90,000 for her partnership interest. If Susan sells her entire partnership interest to Emma for $100,000 cash, what is the amount and character of Susan's gain or loss from the sale?

• A) $10,000 capital gain
• B) $10,000 ordinary income
• C) $20,000 ordinary income; $10,000 capital gain
• D) $10,000 capital loss; $20,000 ordinary income

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