On December 31, 2025, after receipt of his share of partners…
On December 31, 2025, after receipt of his share of partnership income, Bill sold his interest in Clinton Partnership for $30,000 cash and relief of all liabilities. On that date, the adjusted basis of Bill’s partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. What is Bill’s gain or loss on the sale of his partnership interest?