Victor Is a 1/3 Partner in the VRX Partnership with an Outside

question 5

Essay

Victor is a 1/3 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^st for $200,000 cash. The VRX Partnership has the following assets and no liabilities as of January 1: $$\begin{array} { | l | r | r | } \hline \text { Assets: } & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 160,000 & \$ 160,000 \\\hline \text { Receivables } & 50,000 & 50,000 \\\hline \text { Inventory } & 80,000 & 170,000 \\\hline \text { Land held for investment } & 60,000 & 40,000 \\\hline \text { Total } & \$ 350,000 & \$ 420,000 \\\hline\end{array}$$ The equipment was purchased for $360,000 and the partnership has taken $90,000 of depreciation. The stock was purchased 7 years ago. What is the amount and character of Victor's gain or loss on the sale of his partnership interest?

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Definitions:

Trigonal Pyramidal

A molecular geometry where a central atom is surrounded by three atoms placed at the corners of a pyramid, with a vertex missing.

Central Atom

In a molecular structure, the atom that is bonded to several other atoms.

Equivalent Atoms

Equivalent atoms are atoms in a molecule that are indistinguishable from each other in their chemical environment, resulting in identical physical and chemical properties.

Lone Pairs

Pairs of valence electrons that are not shared with another atom and not involved in bonding in a molecule.