KLMN Partnership’s financial records show the following: Mr. T is a 10 percent g

Question

KLMN Partnership’s financial records show the following:

Mr. T is a 10 percent general partner in KLMN. During the year, he received a $1,000 cash distribution from KLMN.

How would your basis computation change if KLMN’s debt at the end of the year was $28,000 more than its debt at the beginning of the year?

Gross receipts from sales $ 670,000 Cost of goods sold (460,000 ) Operating expenses (96,800 ) Business meals and entertainment (6,240 ) Section 1231 loss on equipment sale (13,500 ) Charitable contribution (1,500 ) Distributions to partners (10,000 )

Explanation / Answer

Net receipts at the end of the year will be Gross receipts minus all expenses shown in table and general partner cash distribution

= 670000-460000-96800-6240-13500-1500-10000-1000=$81960

If at end of the year debt is more than $28000 than at the beginning of the year then net income will be reduced by such $28000 it will be $81640-$28000=$53960

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.