Any activity inside the partnership is divided on a percentage basis. So, in your example, the trees are clear cut and each of the 10 partners receives $30K - including her. She receives the same as her spouse would have had he lived and she is taxed exactly as all of the other partners are.
The clear cutting of the trees may reduce the value of the partnership and reduce everyone's basis but that would be an issue for another day, I suppose.
But the second part of the example is the one that is important. The entire partnership is sold for $600K, netting each partner $60K. All of the partners have a capital gain on the sale of the partnership of $50K - $60K minus their basis of $10K - except her. Her basis was increased to $60K at his date of death so the sale of her partnership interest is a wash - she pays no taxes.
That is the tax benefit that she received from his death. It doesn't change the activity inside the partnership at all.
@KevinP1
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
