Kristen and Harrison Are Equal Partners in the KH Partnership

question 107

Multiple Choice

Kristen and Harrison are equal partners in the KH Partnership. The partners formed the partnership five years ago by contributing cash. Prior to any distributions Harrison has a basis in his partnership interest of $44,000. On December 31, KH makes a proportionate operating distribution of $50,000 cash to Harrison. What is the amount and character of Harrison's recognized gain or loss and what is his remaining basis in KH?

• A)$0 gain, $0 basis.
• B)$6,000 capital gain, $0 basis.
• C)$6,000 capital loss, $0 basis.
• D)$6,000 capital gain, $44,000 basis.

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Definitions:

Nativist

A perspective in the field of linguistics and cognitive science which suggests that the ability to acquire language is innate to humans and genetically predetermined.

Cognitive

Relating to cognition, which involves processes such as thinking, knowing, remembering, judging, and problem-solving.

Biological Mechanism

The means or process through which functions are carried out within a living organism, often at the cellular or molecular level.

Noam Chomsky

An influential linguist and cognitive scientist known for his theory of generative grammar, significantly impacting the study of language and the mind.