Susan Is a One-Fourth Limited Partner in the SJ Partnership

question 17

True/False

Susan is a one-fourth limited partner in the SJ Partnership in which capital is not a material income-producing factor.Partnership assets consist of land (value of $100,000,basis of $80,000),accounts receivable (value of $100,000,basis of $0)and cash of $200,000.SJ distributes $100,000 of the cash to Susan in liquidation of her interest.Susan's basis in the partnership interest was $70,000 immediately before the distribution.Susan recognizes $25,000 of ordinary income,and a $5,000 capital gain on the distribution,and the partnership cannot claim a deduction for the $25,000 Susan recognizes as ordinary income.

---

Definitions:

Catharsis Hypothesis

The idea that expressing or venting emotions can lead to a reduction in emotional stress or improvement in psychological well-being.

Cannon-Bard Theory

A theory of emotion proposing that emotions and physiological reactions, such as sweating and trembling, occur simultaneously following a stimulating event.

Imitating

The act of copying or replicating the actions, behaviors, or appearances of someone or something else.

Facial Expression

The movement of the facial muscles to convey emotions, thoughts, or feelings.