How much will be ordinary income

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Problem - Wylie is a general partner in a service-providing partnership and receives cash of $145,000 in liquidation of his partnership interest, in which he has a basis of $110,000. The partnership owns no hot assets and continues in existence. After following all of the classification requirements of § 736, $100,000 of this amount is classified as a property payment [§ 736(b)] and $45,000 is classified as a guaranteed payment [§ 736(a)] (assume that this payment is for unstated partnership goodwill).

As a result of the liquidation proceeds, how much will Wylie recognize as a capital gain or loss, and how much will be ordinary income?

Reference no: EM132648333

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