At the end of last year, Cindy, a 20% partner in the five-person CBT partnership, has an outside basis of $25,000 including her $10,500 share of CBT debt. On January 1 of the current year, Cindy sells her partnership interest to Raymond for a cash payment of $18,000 and the assumption of her share of CBT's debt. CBT has no hot assets. What is the amount and character of Cindy's recognized gain or loss on the sale? A. $7,000 capital loss. B. $7,000 ordinary loss. C. $3,500 capital gain. D. $7,500 ordinary income

At the end of last year, Cindy, a 20% partner in the five-person CBT partnership, has an outside basis of $25,000 including her $10,500 share of CBT debt. On January 1 of the current year, Cindy sells her partnership interest to Raymond for a cash payment of $18,000 and the assumption of her share of CBT's debt. CBT has no hot assets. What is the amount and character of Cindy's recognized gain or loss on the sale? A. $7,000 capital loss. B. $7,000 ordinary loss. C. $3,500 capital gain. D. $7,500 ordinary income

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 47P

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