What is the amount of Maxwell recognized gain or loss

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Problem - Maxwell is a 50 percent partner in M&P Associates. Pam, Maxwell's daughter, owns the other 50 percent interest in the partnership. During the current tax year, Maxwell sells ordinary income property to M&P Associates for $70,000. The property's basis to Maxwell is $75,000. Also, Pam sells her personal Mercedes-Benz, with a basis of $25,000, for $40,000 to M&P Associates for use in the partnership's business.

Required -

What is the amount of Maxwell's recognized gain or loss on his transaction, and what is the nature of the gain or loss?

What is the amount and nature of Pam's gain or loss on her transaction with the partnership?

Reference no: EM132702963

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