Heidi and Teresa Are Equal Partners in the HT Partnership

question 69

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 $36,750 cash and stock with a fair value of $24,000 (inside basis of $8,600). 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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Definitions:

Indirect Contact

A method of disease transmission where an infectious agent is transferred from one individual to another through a secondary object or person.

Pathogen

An agent, particularly a microorganism, that causes disease in its host.

Antibiotics

Drugs that are employed to combat bacterial infections through eradication or suppression of bacterial growth.

Inhalation

The act of taking air and other substances into the lungs through breathing, a key route of exposure to airborne pollutants and pathogens.