Sarah is a 40% partner in the Summit Partnership. At the beginning of the tax year, Sarah's basis in the partnership interest was $80,000, including her share of partnership liabilities. During the current year: ⚫ Summit reported an ordinary income of $60,000 ⚫ Summit distributed $8,000 to each partner ($24,000 total) • At year-end, Sarah's share of partnership liabilities decreased by $15,000 What is Sarah's basis in the partnership interest at the end of the year? a. $81,000 b. $89,000 c. $96,000 d. $101,000
Sarah is a 40% partner in the Summit Partnership. At the beginning of the tax year, Sarah's basis in the partnership interest was $80,000, including her share of partnership liabilities. During the current year: ⚫ Summit reported an ordinary income of $60,000 ⚫ Summit distributed $8,000 to each partner ($24,000 total) • At year-end, Sarah's share of partnership liabilities decreased by $15,000 What is Sarah's basis in the partnership interest at the end of the year? a. $81,000 b. $89,000 c. $96,000 d. $101,000
Chapter21: Partnerships
Section: Chapter Questions
Problem 49P
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Sarah is a 40% partner in the summit partnership solve this accounting questions
Transcribed Image Text:Sarah is a 40% partner in the Summit Partnership. At the
beginning of the tax year, Sarah's basis in the partnership interest
was $80,000, including her share of partnership liabilities. During
the current year:
⚫ Summit reported an ordinary income of $60,000
⚫ Summit distributed $8,000 to each partner ($24,000 total)
•
At year-end, Sarah's share of partnership liabilities decreased
by $15,000
What is Sarah's basis in the partnership interest at the end of the
year?
a. $81,000
b. $89,000
c. $96,000
d. $101,000
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