1. What did your clients attempt to accomplish by setting up the transactions in the manner they proposed? b. What are your clients chances of success if they go ahead with the transactions as plan in spite of the ruling? 2. Is the ruling correct in stating that no matter how the transactions are handled, other than as your clients proposed, the income tax will be the result? 3. If your clients decide to sell their partnership interest rather than going through with the proposed transactions: Can they alter the income tax results stated in the ruling by having the partnership use $60.000 of its cash to pay down the mortgage on the land in order to secure a release from the mortgage of 20% of the land, sell 20% of the land for a $200.000 note and mortgage to an unrelated third party, use the remaining cash to reduce current liabilities and then have able Bernstine, and Charles sell their partnership interest to Peters who would assume the remaining current liabilities and mortgage liabilities? For more information on Partnership Interest read this: https://en.wikipedia.org/wiki/Partnership_accounting
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