What is fox gain or loss on the sale

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Problem - On December 31 of the current year, after receipt of his share of partnership income, Fox sold his interest in a limited partnership for $50,000 of cash plus relief of all liabilities. On that date, the adjusted basis of Fox's partnership interest was $60,000, consisting of his capital account of $35,000 and his share of the partnership liabilities of $25,000. The partnership has no unrealized receivables or substantially appreciated inventory. What is Fox's gain or loss on the sale of his partnership interest?

a. Ordinary loss of $10,000

b. Ordinary gain of $15,000

c. Capital loss of $10,000

d. Capital gain of $15,000

Reference no: EM132663369

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