Esther and Elizabeth are equal partners in the EE Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners each have a $52,200 basis in their partnership interests, including their share of partnership liabilities. On December 31, EE Partnership repays $61,400 of debt. What is the amount and character of Esther's recognized gain or loss? What is Esther's remaining basis in EE?

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The Answer of Esther and Elizabeth are equal partners in the EE Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners each have a $52,200 basis in their partnership interests, including their share of partnership liabilities. On December 31, EE Partnership repays $61,400 of debt. What is the amount and character of Esther's recognized gain or loss? What is Esther's remaining basis in EE?

Esther and Elizabeth Are Equal Partners in the EE Partnership