Question

William and Irene each contributed​ $20,000 cash to the WI Partnership on January 1 of last year. William and Irene share profits and losses equally. Last​ year, the partnership reported taxminus−exempt interest income of​ $4,000. This​ year, each partner receives​ $1,000 of the taxminus−exempt interest income in a cash distribution. There are no partnership liabilities and no other​ income, loss,​ contributions, or distributions during both years.​ William's basis in the partnership interest following these transactions is

Answer 1

$21,000

Step-by-step explanation:

Capital Account:

Particular Williams Irene Particular Williams Irene

$ $ $ $

Balance c/d 21,000 21,000 Cash 20,000 20,000

Cash distributn. 1,000 1,000

21,000 21,000 21,000 21,000

William's basis in the partnership business, is equal basis, because, the profit sharing ratio is on equal basis. The answer is $21,000.