Question

Jerry contributed $8,000 for a 25% interest in a bookstore. He also contributed a cash register, with a fair market value of $490 and adjusted basis of $350. The store had a profit of $60,000 at the end of the year. What is Jerry's partnership basis in the bookstore at the end of the year?

A- $23,000

B- $23,300

C- $23,350

D- $23,490

Answer 1

The Jerry's partnership basis in the bookstore at the end of the year is $23,350.

Step-by-step explanation:

Workings

Contributed Capital = $ 8,000

Add: Adjusted basis of cash register = $ 350

Add: Share of Profit ($60000 X 25%) = $ 15,000

Partnership basis at the end of the year = $ 23,350