Heather sells land (adjusted basis, $75,000; fair market value, $95,000) to a partnership in which she controls an 80% capital interest. The partnership pays her only $50,000 for the land. a. Heather's realized loss cannot berecognized. Feedback Check My Work Certain transactions between a partner and the partnership are treated as if the partner were an outsider, dealing with the partnership at arm's length. Loan transactions, rental payments, and sales of property between the partner and the partnership are generally treated in this manner. b. The partnership later sells the land to a third party for $80,000. The partnership has a realized gain of and a recognized gain of on its sale of the land