Question

Jack’s basis in JTD Partnership interest is $200,000 at the beginning of the tax year. His share of partnership items is as follows: ($120,000) ordinary loss, $6,000 tax-exempt interest and a $14,000 long-term capital gain. In addition, he received a $20,000 cash distribution during the year; and, his share of partnership debt increased by $10,000. What is Jack’s ending basis in his partnership interest?

Answer 1

Particulars	Amount
Beginning basis	$           200,000
Add: share
Loss	$         (120,000)
Interest	$               6,000
Capital gain	$             14,000
Distribution	$            (20,000)
	$             80,000
Add: share of debt increase	$             10,000
Ending basis	$             90,000

Answer is $90,000.

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