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13 July, 07:37

Joy is a 30 percent partner in the JOM Partnership when she sells her entire interest to Hope for $72,000 cash. At the time of the sale, Joy's basis in JOM is $44,000 (which includes her $6,000 share of JOM liabilities). JOM does not have any hot assets. What is Joy's gain or loss on the sale of her interest?

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  1. 13 July, 08:02
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    Answer: $34,000

    Explanation: The gain or loss of joy on the sale can be computed using following equation : -

    Gain or loss = Amount realized on sale + relief on debt - JOM basis

    now, putting the values into equation above we get : -

    Gain or loss = $72,000 + $6,000 - $44,000

    Gain or loss = $34,000 gain
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