Oscar, Felix, and Marv are all one-third partners in the capital and profits of Eastside general partnership. In addition to their normal share of the partnership’s annual income, Oscar and Felix receive annual guaranteed payments of $7,000 to compensate them for additional services they provide. Eastside’s income statement for the current year reflects the following revenues and expenses:
Sales revenue $ 405,000
Dividend income 5,700
Short-term capital gains 2,800
Cost of goods sold (210,000)
Employee wages (115,000)
Depreciation expense (28,000)
Guaranteed payments (14,000)
Miscellaneous expenses (9,500)
Overall net income $ 37,000
In addition, Eastside owed creditors $120,000 at the beginning of the year but managed to pay down its debts to $60,000 by the end of the year. All partnership debt is allocated equally among the partners. Finally, Oscar, Felix and Marv had a tax basis of $80,000 in their interests at the beginning of the year. What tax basis does Oscar have in his partnership interests at the end of the year?
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