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Good Times is a general partnership with the following balance sheets: ...

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Accounting

Good Times is a general partnership with the following balance sheets:

Basis

FMV

Cash

$15,000

$15,000

Capital assets

35,000

75,000

Land

85,000

240,000

Totals

$135,000

$330,000

Recourse liabilities

$90,000

$90,000

Capital, Claire

15,000

80,000

Capital, Lorie

15,000

80,000

Capital, Tom

15,000

80,000

Totals

$135,000

$330,000

The partners share equally in profits, losses and capital. Tom is negotiating to sell his interest in the partnership to an unrelated buyer. Assume the buyer is willing to pay $120,000 cash for half Toms interest.

  1. What will be the amount realized by Tom on the sale?
  2. What is the tax basis of the interest to be sold by Tom?
  3. How much gain will Tom recognize on the sale?
  4. What will be the buyers tax basis in the newly acquired interest?

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