Doug and Frank Form a Partnership, D and F Advertising

question 1406

Essay

Doug and Frank form a partnership, D and F Advertising, each contributing $50,000 to start the business. During the first year of operations, D and F earns $80,000, which is allocated $40,000 each to Doug and Frank. At the beginning of the second year, Doug sells his interest to Marcus for $90,000. What is the amount of Doug's taxable gain on the sale?

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Definitions:

Most People Believe

A phrase indicating a common or widespread opinion or perception among the general population.

Believe

To accept something as true, genuine, or real without absolute proof.

Appeal to Ignorance

A logical fallacy that claims a proposition is true because it has not yet been proven false, or vice versa.

Fallacy of Relevance

The basis of the argument is logically disconnected from, or not related to, the outcome.