Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included inthat 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: $2,000Ordinary income of the partnership: $10,000A guaranteed payment: $60,000All of the above income and deduction items are the same amount for both book accounting income and taxableincome.At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cashdistribution 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 Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included inthat amount is a $15,000 share of partnership liabilities.During the year, Jack is allocated the following amounts:Long-term capital gain: $2,000Ordinary income of the partnership: $10,000A guaranteed payment: $60,000At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cashdistribution of $40,000. These payments are intended as a partial liquidation of his partnership interest.What is the amount of Jack's outside basis after all of these events?DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!Answer: 99000

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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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