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On June 30, 2012, Berk, a calendar-year taxpayer, retired from his partnership. At that time, his capital account was $50,000 and his share of the partnership’s liabilities was $30,000. Berk’s retirement payments consisted of being relieved of his share of the partnership liabilities and receipt of cash payments of $5,000 per month for eighteen months, commencing July 1, 2012. Assuming Berk makes no election with regard to the recognition of gain from the retirement payments, he should report income of
2012 . . . . 2013