Heidi and Teresa Are Equal Partners in the HT Partnership

question 48

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 $46,300 basis in their partnership interests. On December 31, the partnership makes a pro rata operating distribution to Heidi of $47,000 cash. What is the amount and character of Heidi's recognized gain or loss? What is Heidi's remaining basis in HT?

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Definitions:

Expected Counts

The theoretical frequency of occurrences in each category of a contingency table under the assumption of independence in a chi-square test.

Goodness-of-fit Test

A statistical test used to determine how well a statistical model fits a set of observations. It measures the discrepancy between observed values and the values expected under the model in question.

SAS Proficiency

The level of skill and knowledge in using Statistical Analysis System (SAS) software for statistical analysis.

Statistical Software

Computer programs designed to perform statistical analysis, helping in data entry, manipulation, and presentation of results.