Answer:
$2,700
Explanation:
First, we need to determine the value of the warehouse at sale.
Current value = $150,000 - $40,000
= $110,000
The gain or loss = Selling price - Current value
= $230,000 - $110,000
= $120,000.
We will also determine the partnership interest amount, which is;
= 51% × $230,000
= $117,300
This means that the interest value of $117,300 will be used to buy off the warehouse.
Hence, Huey's gain and taxable gain will be;
= $120,000 - $117,300
= $2,700
