Santiago and Lauren are equal partners in the PJenn Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests:
Partner
Outside Basis
Santiago
$24,450
Lauren
$24,450
On December 31 of the current year, the partnership makes a pro rata operating distribution of:
Partner
Distribution
Santiago
Cash $28,150
Lauren
Cash $20,100
Property $8,050
(FMV) ($2,770 basis to partnership)
Note: Leave no answer blank. Enter zero if applicable.
Problem 10-40 Part a (Algo)
a. What are the amount and character of Santiago's recognized gain or loss?