Determining receipt of partnership interest in current year

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Tina and Randy formed the TR Partnership four years ago. Because they decided the company needed some expertise in multimedia presentations, they offered Susan a 1/3 interest in partnership capital and profits if she would come to work for the partnership. On July 1 of the current year, the unrestricted partnership interest (fair market value of $25,000) was transferred to Susan. How should Susan treat the receipt of the partnership interest in the current year?

a. Nontaxable.

b. $25,000 short-term capital gain.

c. $25,000 long-term capital gain.

d. $25,000 ordinary income.

e. None of the above.

Reference no: EM13153399

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