Doug and Frank form a partnership, D and F Advertising, each contributing $50,000 to start the business. During the first year of operations, D and F earns $80,000, which is allocated $40,000 each to Doug and Frank. At the beginning of the second year, Doug sells his interest to Marcus for $90,000. What is the amount of Doug's taxable gain on the sale?
What will be an ideal response?
here is no gain on the sale.
*Adjusted basis as of date of sale is the $50,000 contributed basis plus the $40,000 income allocated to basis.
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