May and Lori form the ML General Partnership. May contributed $20,000 cash in exchange for her 50 percent partnership interest. During the first year of partnership operations, the partnership reported net taxable income of $10,000, May withdrew $8,000 cash from the partnership, and the partnership took out an $18,000 loan on the last day of the year. May's adjusted basis for her partnership interest at year end is: a. $38,000 b. $30,000 c. $26,000 d. $25,000 e. $20,000 f. $17,000
May and Lori form the ML General
Partnership - When a group of persons come together and join hands to start a business with the motive of profit earning.
May Interest will be
Start with the contribution of Capital = $20,000
Add- Share in Net Taxable Income (50%) = $5,000
less- Drawings made during the year = $8,000
Add- Loan Contribution = $9,000
May Interest = $26,000
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