Question

At the beginning of the tax year, barnaby's basis in the bbb partnership was $147,400, including his $14,740 share of partnership debt. at the end of the tax year, his share of debt was $22,110. his share of the partnership's income for the year was $58,960, and he received cash distributions totaling $36,850. in addition, his share of the partnership's nontaxable income was $2,948. how much is barnaby's basis at the end of the tax year?

Answer 1

Barnaby's basis in the BBB partnership at the end of the tax year is $179,828. This is calculated by starting with the initial basis and adjusting for the partnership's income, nontaxable income, change in his share of the partnership debt, and cash distributions received.

Step-by-step explanation:

To calculate Barnaby's basis in the BBB partnership at the end of the tax year, start with his initial basis and make the following adjustments:

• Add his share of partnership's income: $58,960.
• Add his share of nontaxable income: $2,948.
• Add the increase in his share of partnership debt: ($22,110 - $14,740) = $7,370.
• Subtract cash distributions received: $36,850.

So, his ending basis would be calculated as follows:

Beginning basis: $147,400
+ Income: $58,960
+ Nontaxable income: $2,948
+ Increase in debt: $7,370
- Cash distributions: $36,850
Ending basis: $179,828