The RBD Partnership Balance Sheet on August 31 of the Current

question 35

Multiple Choice

The RBD Partnership balance sheet on August 31 of the current year is as follows:

On that date,Rachel sells her one-third partnership interest to Bill for $300,000,including cash and relief of Rachel's share of the nonrecourse debt.The nonrecourse debt is shared equally among the partners.Rachel's outside basis for her partnership interest is $250,000.How much capital gain and/or ordinary income will Rachel recognize on the sale?

• A)$20,000 capital gain; $30,000 ordinary income.
• B)$30,000 capital gain; $20,000 ordinary income.
• C)$50,000 capital gain; $0 ordinary income.
• D)$0 capital gain; $50,000 ordinary income.
• E)None of the above.

---

Definitions:

Fonts

Collections of characters, numbers, and symbols in a specific style and size, used in typing and designing documents.

Paragraph Formatting

The process of adjusting the appearance of a text block in a document, including alignment, line spacing, and indentation.

Title Page

The first page of a book, document, or report, displaying the title, author's name, and other relevant information.

Text

Written or typed characters used to convey information or communicate in documents and applications.