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

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Definitions:

Functional Turnover

Occurs when employees who are underperforming or not well-suited for their roles leave an organization, potentially benefiting the organization's overall performance.

Unethical Practices

Actions and behaviors that are deemed morally wrong within the context of business operations, violating professional or societal standards.

Low-Level Employees

Employees who work in positions that typically require less skill and are lower paying, often referred to as entry-level positions.

High-Level Employees

Workers who hold senior or upper-management positions within an organization, typically responsible for making strategic decisions.