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Newton is a one-third owner of ProRite Partnership. Newton has decided to sell his interest...

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Accounting

Newton is a one-third owner of ProRite Partnership. Newton has decided to sell his interest in the business to Betty for $60,500 cash plus the assumption of his share of ProRites liabilities. Assume Newtons inside and outside basis in ProRite are equal. ProRite shows the following balance sheet as of the sale date:
Tax Basis FMV
Assets:
Cash $ 81,000 $ 81,000
Receivables 46,250 46,250
Inventory 40,500 94,950
Land 42,750 28,550
Totals $ 210,500 $ 250,750
Liabilities and capital:
Liabilities $ 60,000
Capital Newton 50,167
Barbara 50,166
Liz 50,167
Totals $ 210,500

What is the amount and character of Newtons recognized gain or loss?

Amount Character of gain or loss

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