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At the beginning of the current tax year, Margaret's tax basis in her 30 percent interest in MP partnership was $3,000. During the year, Margaret did not make any additional contributions to MP and her share of MP liabilities did not change. During the year, MP distributed $5,000 to Margaret and reported the following items of partnership income, deduction, gain and loss. a. At the end of the year, Margaret sold her interest in the partnership to an unrelated buyer for $4,500. How much gain or loss will she recognize on the sale? $0 $3,200 gain b. C. d. Taxable income Tax-exempt interest Section 1231 loss e. $15,000 6,000 (10,000) ($4,500) loss ($1,800) loss None of these

22. At the beginning of the current tax year, Margaret's tax basis in her 30 percent interest in MP partnership was $3,000. During the year, Margaret did not make any additional contributions to MP and her share of MP liabilities did not change. During the year, MP distributed $5,000 to Margaret and reported the following items of partnership income, deduction, gain and loss. At the end of the year, Margaret sold her interest in the partnership to an unrelated buyer for $4,500. How much gain or loss will she recognize on the sale? a. $0 b. $3,200 gain c. ($4,500) loss d. ($1,800) loss e. None of these

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