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Sale of a Partnership Interest

KFINE1
Level 1

I have a client who is selling a partnership interest for $1,000,000. His basis is zero, other than his share of the partnership liabilities, which is also $1,000,000. Would his gain on the sale be $1,000,000 or $2,000,000, as he is relieved of his share of the liabilities?

 

Thanks in advance.

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