The partnership has 60000 of liabilities when betty retires

Reference no: EM13584177

Betty retires from the BS Partnership when the basis of her one-third interest is $105,000, which includes her share of liabilities. At the time of her retirement, the partnership had the following assets:

Assets P/S Basis FMV

Cash $145,000 $145,000

Receivables 40,000 40,000

Land 130,000 220,000

315,000 405,000

The partnership has $60,000 of liabilities when Betty retires. The partnership will pay Betty cash of $130,000 to retire her partnership interest.

What are the amount and character of the gain or loss for Betty?

Reference no: EM13584177

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