Megan is a 40% partner and Karen is a 60% partner of a newly formed partnership. Megan has an outside basis of $50,000 as of January 1, 2018. The partnership does not make any distributions during 2018, but had $180,000 of ordinary income. In 2019, ordinary income was $10,000. In December 2019 Megan received a $40,000 cash distribution. What is Megan's basis at January 1, 2020? Select one: O a. $126,000 O b. $79,000 O c. $76,000 O d. $86,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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