In Year 1 you invested $500,000 in exchange for a 40% partnership interest in ABC, LP. You later received a K-1 from ABC reporting $50,000 as your share of ABC’s Year 1 taxable income. During Year 1 you received a cash distribution from ABC of $75,000. You received a K-1 from ABC reporting $85,000 as your share of ABC’s Year 2 NOL. During Year 2 you received a cash distribution from ABC of $90,000. You received a K-1 from ABC reporting $110,000 as your share of ABC’s Year 3 taxable income. During Year 3 you received a cash distribution from ABC of $125,000. After all of the above, what is your adjusted tax basis in your partnership interest in ABC? $________
In Year 1 you invested $500,000 in exchange for a 40% partnership interest in ABC, LP. You later received a K-1 from ABC reporting $50,000 as your share of ABC’s Year 1 taxable income. During Year 1 you received a cash distribution from ABC of $75,000. You received a K-1 from ABC reporting $85,000 as your share of ABC’s Year 2 NOL. During Year 2 you received a cash distribution from ABC of $90,000. You received a K-1 from ABC reporting $110,000 as your share of ABC’s Year 3 taxable income. During Year 3 you received a cash distribution from ABC of $125,000. After all of the above, what is your adjusted tax basis in your partnership interest in ABC? $________
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 57P
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Question
In Year 1 you invested $500,000 in exchange for a 40% partnership interest in ABC, LP.
You later received a K-1 from ABC reporting $50,000 as your share of ABC’s Year 1 taxable income. During Year 1 you received a cash distribution from ABC of $75,000.
You received a K-1 from ABC reporting $85,000 as your share of ABC’s Year 2 NOL. During Year 2 you received a cash distribution from ABC of $90,000.
You received a K-1 from ABC reporting $110,000 as your share of ABC’s Year 3 taxable income. During Year 3 you received a cash distribution from ABC of $125,000.
After all of the above, what is your adjusted tax basis in your partnership interest in ABC?
$________
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