At the end of last year, Ellen, a 25% partner in the four-person MNT Partners, had an outside basis of $28,000, which included her $11,000 share of partnership liabilities. On January 1, she sold her entire interest to James for $20,000 cash plus James assuming her share of the partnership's debt. MNT has no hot assets. What is the amount and character of Ellen's recognized gain or loss?
At the end of last year, Ellen, a 25% partner in the four-person MNT Partners, had an outside basis of $28,000, which included her $11,000 share of partnership liabilities. On January 1, she sold her entire interest to James for $20,000 cash plus James assuming her share of the partnership's debt. MNT has no hot assets. What is the amount and character of Ellen's recognized gain or loss?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 47P
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Please provide the correct answer to this general accounting problem using valid calculations.
Transcribed Image Text:At the end of last year, Ellen, a 25% partner in the four-person MNT
Partners, had an outside basis of $28,000, which included her $11,000
share of partnership liabilities. On January 1, she sold her entire
interest to James for $20,000 cash plus James assuming her share of
the partnership's debt.
MNT has no hot assets. What is the amount and character of Ellen's
recognized gain or loss?
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