Artemis is a 30% partner in the CAR Partnership. At the beginning of the tax year, Artemis' basis in the partnership interest was $60,000, including a share of partnership liabilities. During the current year, CAR reported net ordinary income of $40,000. In addition, CAR distributed $5,000 to each of the partners ($15,000 total). At the end of the year, Artemis' share of partnership liabilities increased by $20,000. Artemis' basis in the partnership interest at the end of the year is:  a. $87,000. b. $75,000. c. $82,000. d. $120,000. e. $60,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Artemis is a 30% partner in the CAR Partnership. At the beginning of the tax year, Artemis' basis in the partnership interest was $60,000, including a share of partnership liabilities. During the current year, CAR reported net ordinary income of $40,000. In addition, CAR distributed $5,000 to each of the partners ($15,000 total). At the end of the year, Artemis' share of partnership liabilities increased by $20,000. Artemis' basis in the partnership interest at the end of the year is: 

a. $87,000.

b. $75,000.

c. $82,000.

d. $120,000.

e. $60,000.

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