Reference no: EM132971399

Question - Green, Black, and Blue each own one-third of Color Partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service company whose sole assets are $600 in accounts receivable. The partnership has no liabilities. Green sells his partnership interest to Purple at a Fair Market Value of $200.

-How much, if any gain or loss does Green recognize on the sale of the partnership interest?

-If there is a recognized gain or loss by Green what is the character of it? If no gain or loss enter $0?

-What is Purple's basis in the partnership?

-Assume no elections are made at the partnership level. When the receivable is collected how much income is allocated to Purple.

-After the receivables are collected what is Purple's outside adjusted basis in the partnership?

-If the partnership liquidates distributing $200 to each partner if Purple recognizes gain or loss indicate the amount, if a loss enter in parentheses if no gain or loss enter $0.

-If Purple recognizes gain or loss on the distribution, what is the character of the gain or loss, if no gain then put "n/a".

-How much if anything is Black's gain or loss on receipt of her $200 from Color?