Could you work this problem out step by step to show how to

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Could you work this problem out step by step to show how to get answers? Otter, a partnership, is not a taxpaying entity. Its profit and separate items flow through to the partners. The partnership's Form 1065 reports net profit of $110,000. The partnership also reports the $15,000 short-term capital loss as a separately stated item on Form 1065. Ellie and Linda each receive a Schedule K-1 reflecting net profit of $55,000 and separately stated short-term capital loss of $7,500, which each reports on her own return . The withdrawals do not affect taxable income but decrease their basis in the partnership.

Reference no: EM13570820

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