Abby and Bob are partners in an equal general partnership. Abby has a basis of $70,000 in her partnership interest, and Bob has a basis of $30,000 in his partnership interest. Describe the effect of each of the following events on the basis of each partner’s partnership interest:a) The partnership itself makes a charitable contribution of $8,000;b) Each partner’s distributive share of partnership taxable income is $10,000;c) The partnership has $18,000 in interest income from tax exempt municipal bonds; andd) The partnership makes a cash distribution of $10,000 to each.
Abby and Bob are partners in an equal general partnership. Abby has a basis of $70,000 in her partnership interest, and Bob has a basis of $30,000 in his partnership interest. Describe the effect of each of the following events on the basis of each partner’s partnership interest:a) The partnership itself makes a charitable contribution of $8,000;b) Each partner’s distributive share of partnership taxable income is $10,000;c) The partnership has $18,000 in interest income from tax exempt municipal bonds; andd) The partnership makes a cash distribution of $10,000 to each.
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 6CPA
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Abby and Bob are partners in an equal general
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