Heidi and Teresa Are Equal Partners in the HT Partnership

question 21

Essay

Heidi and Teresa are equal partners in the HT Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners each have a $50,000 basis in their partnership interests. On December 31, the partnership makes a proportionate operating distribution to Teresa of $40,000 cash and stock with a fair value of $20,000 (inside basis of $7,000). What is the amount and character of Teresa's recognized gain or loss? What is Teresa's remaining basis in HT?

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Conceptual

Related to or based on mental concepts; often used in contrast with practical, empirical, or physical.

Emotional

Pertaining to feelings or psychological states that arise in response to events, relationships, or internal thoughts.

Emotional Skill

The ability to recognize, understand, manage, and use one's own emotions and those of others effectively in interactions and decision-making.

Human

Pertaining to or characteristic of people or human beings.