28. The ABCD partnership has four partners. Each partner’s adjusted basis in the

Question

28.        The ABCD partnership has four partners. Each partner’s adjusted basis in the partnership interest owned by that partner was $100,000 on the first day of last year. The partnership reported net income for last year of $80,000 (there were no separately stated items to take into account). The partnership distributed pro rata to each partner identical parcels of land that each had a fair market value of $25,000 and a basis to the partnership of $10,000. What is each partner’s adjusted basis in the partner’s partnership interest at the close of last year?

a. $90,000

b.   $110,000

c. $120,000

d. $170,000

Explanation / Answer

Each partner’s adjusted basis in the partner’s partnership interest at the close of last year =
Beginning Capital = $100,000
+ Net Income (80,000/4) = $20,000   
- Land Basis = $10,000
Adjusted Basis = $110,000

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

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