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1 What is the tax consequence to Ernesto of the sale?

1 What is the tax consequence to Ernesto of the sale?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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contributed $1,000 for his one-third partnership interest in profits and loa88. 2. Ernesto and Fran are general partners in the EF partnership. Ernesto Fran contributed $2,000 for a two-thirds partnership interest in profits loss. The partnership borrowed $1,200 to invest in marketable securiti which it purchased for $4,200. When the partnership assets had appreciatl to $4,800, Ernesto sold one-half of his general partnership interest to Gary for $600 cash. What is the tax consequence to Ernesto of the sale?
Transcribed Image Text:contributed $1,000 for his one-third partnership interest in profits and loa88. 2. Ernesto and Fran are general partners in the EF partnership. Ernesto Fran contributed $2,000 for a two-thirds partnership interest in profits loss. The partnership borrowed $1,200 to invest in marketable securiti which it purchased for $4,200. When the partnership assets had appreciatl to $4,800, Ernesto sold one-half of his general partnership interest to Gary for $600 cash. What is the tax consequence to Ernesto of the sale?
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