What are the tax consequences


Nathan is a 10% partner and Ben is a 90% partner in a partnership that owns a piece of land with a tax basis of $50,000 and a value of $750,000. Nathan and Ben formed the partnership years ago. The land is encumbered by a $200,000 nonrecourse mortgage. 1. Is Nathan sells his entire interest to Michelle for $55,000, how much gain is recognized by Nathan? What is the character of the gain? What are the tax consequences and alternatives to Michelle? 2. Is there a difference if Ben sold his entire interest?

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Accounting Basics: What are the tax consequences
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