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2 December, 00:43

Partner Beth has a basis of $10,000 in a partnership at the beginning of the year. She receives $6,000 in cash distributions, her distributive share of income is $5,000, and she receives a land distribution with a basis of $8,000 (FMV $20,000). What is Beth's partnership interest basis at the end of the year?

a. $0

b. $1,000

c. $9,000

d. $10,000

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Answers (1)
  1. 2 December, 01:02
    0
    b. $1,000

    Explanation:

    Basis at the beginning of the year $10,000

    Less cash received $6,000

    =$4,000

    Distributive share of income is $5,000

    Less land distribution with a basis of $8,000

    =$3,000

    Hence:

    $4,000-$3,000

    =$1,000

    Therefore Beth's partnership interest basis at the end of the year will be $1,000
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