Kristen and Harrison Are Equal Partners in the KH Partnership

question 18

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 $33,000. On December 31, KH makes a proportionate operating distribution of $43,000 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) $10,000 capital gain, $0 basis.
• C) $10,000 capital loss, $0 basis.
• D) $10,000 capital gain, $33,000 basis.

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Definitions:

TSH

Thyroid-Stimulating Hormone, a hormone produced by the pituitary gland that regulates the production of thyroid hormones.

Uterus

(uterus) The hollow, muscular organ of the female reproductive tract in which the fetus undergoes development.

Oxytocin

A hormone and neurotransmitter involved in childbirth and lactation, also playing a role in social bonding and behavior.

Calcitonin

A hormone produced by the thyroid gland that helps regulate calcium levels in the blood.