Question

jerry is a 35 percent partner in the jjm partnership when he sells his entire interest to lucia for $79,750 cash. at the time of the sale, jerry's basis in jjm is $50,000. jjm does not have any debt or hot assets. what is jerry's gain or loss on the sale of his interest?

Answer 1

Jerry realizes a gain of $29,750 on the sale of his partnership interest, which is calculated by subtracting his basis of $50,000 from the sale amount of $79,750.

Step-by-step explanation:

Jerry's gain on the sale of his interest in the JJM partnership can be calculated by subtracting his basis in the partnership from the amount he receives for the sale. Jerry's basis is given as $50,000, and he sold his interest for $79,750 cash. To calculate the gain, you subtract the basis from the amount received:

Gain = Amount Received - Basis

Gain = $79,750 - $50,000

Gain = $29,750

Therefore, Jerry realizes a gain of $29,750 on the sale of his partnership interest.

Since the question does not mention any debt or hot assets, the calculation is straightforward and does not require any further adjustments.