BDD Partnership is a service-oriented partnership
BDD Partnership is a service-oriented partnership that has three equal general partners. One of them, Barry Evans, sells his interest to another partner, Dale Allen, on December 31 (the last day of the current tax year) for $90,000 cash and the assumption of Barry's share of partnership liabilities. (Liabilities are shared equally by the partners.)
Immediately before the sale (after reflecting operations for the year), the partnership's cash basis
f. How would Barry's tax result differ if, instead, BDD distributed $90,000 of its cash in liquidation of Barry's interest (with the remaining partners assuming Barry's share of partnership debt)? Why is this result different from Barry’s result when the interest is sold? The LLC's operating agreement does not address payment of goodwill to the partner.
Barry's gain would be $50,000. It would be classifed as ____________ of ordinary income and __________ of
The partnership may deduct the code section 736(a) payment of __________.
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