Wilson has a 40 percent interest in the assets and income of the CC&W Partnershi

Question

Wilson has a 40 percent interest in the assets and income of the CC&W Partnership, and the basis in his partnership interest is $45,000 at the beginning of 2017. During 2017, the partnership's net loss is $60,000 and Wilson's share of the loss is $24,000. Also, Wilson receives a cash distribution from the partnership of $12,000 on June 30, 2017.

a. Indicate the amount of income or loss from the partnership that should be reported by Wilson on his 2017 individual income tax return. $

b. Calculate Wilson's basis in his partnership interest at the end of 2017. $

Explanation / Answer

a. Amount of income or loss from the partnership that should be reported by Wilson on his 2017 Individual Income tax return = $ 24,000 (i.e. his share of loss in the partnership)

b. Wilson's Basis in his partnership

= Beginning Basis in the partnership interest - Share in net loss of partnership - Cash distribution received

= 45,000 - 24,000 - 12,000

= $9,000

WIlson's Basis in his partnership interest at the end of 2017 = $9,000

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