Katrina is a one-third partner in the KYR partnership (calendar year-end). Katrina decides she wants to exitthe partnership and receives a proportionate distribution to liquidate her partnership interest on January 1. The partnership has no liabilities and holds the following assets as of January 1: 
Katrina receives one-third of each of the partnership assets. She has a basis in her partnership interest of$250,000. What is the amount and character of any recognized gain or loss to Katrina? What is Katrina's basis in the distributed assets?
Definitions:
Activity Rates
are used in activity-based costing to allocate costs to products or services based on specific activities requiring the costs, like inspection or setup.
Activity-Based Costing
An approach to costing that apportions overhead and indirect charges to particular activities, ensuring more accurate cost determinations for products or services.
Overhead Cost
Expenses related to the general operation of a business that cannot be directly traced to a specific product or service, such as utilities and rent.
Activity Cost Pools
Aggregations of all costs associated with specific activities used in activity-based costing to allocate costs more accurately.
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