Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included in that amount is a $15,000 share of partnership liabilities. His capital account is $70,000 on January 1st of 2021. During the year, Jack is allocated the following amounts: Long-term capital gain: $2,000 Ordinary income of the partnership: $10,000 A guaranteed payment: $60,000 All of the above income and deduction items are the same amount for both book accounting income and taxable income. At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cash distribution of $40,000. These payments are intended as a partial liquidation of his partnership interest. What is the amount of Jack's capital account after all of these events? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!
Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included in that amount is a $15,000 share of partnership liabilities. His capital account is $70,000 on January 1st of 2021. During the year, Jack is allocated the following amounts: Long-term capital gain: $2,000 Ordinary income of the partnership: $10,000 A guaranteed payment: $60,000 All of the above income and deduction items are the same amount for both book accounting income and taxable income. At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cash distribution of $40,000. These payments are intended as a partial liquidation of his partnership interest. What is the amount of Jack's capital account after all of these events? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 2BCRQ
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This answer is wrong . please give me the right answer.
Transcribed Image Text:Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included in
that amount is a $15,000 share of partnership liabilities.
His capital account is $70,000 on January 1st of 2021.
During the year, Jack is allocated the following amounts:
Long-term capital gain: $2,000
Ordinary income of the partnership: $10,000
A guaranteed payment: $60,000
All of the above income and deduction items are the same amount for both book accounting income and taxable
income.
At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cash
distribution of $40,000. These payments are intended as a partial liquidation of his partnership interest.
What is the amount of Jack's capital account after all of these events?
DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!
Answer: 117000
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