The XYZ partnership has the following balance sheet: ...
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Accounting
The XYZ partnership has the following balance sheet:
| Basis | FMV | |||
| Land | $60,000 | $81,000 | ||
| Inventory | $27,000 | $54,000 | ||
| Unrealized Rec. | $ 0 | $15,000 | ||
| Liabilities | $30,000 | $30,000 | ||
| Capital, X | $21,000 | $40,000 | ||
| Capital, Y | $18,000 | $40,000 | ||
| Capital, Z | $18,000 | $40,000 | ||
| $87,000 | $150,000 | |||
If X sells her partnership interest to W for $40,000 cash ($10,000 this year and $30,000 next year), what is her gain or loss each year, and what is its character? (Assume each partner has a 1/3 share of liabilities.)
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