6. Bobbie and Fran are partners in the Quick Freeze partnership, owning respecti

Question

6.         Bobbie and Fran are partners in the Quick Freeze partnership, owning respectively 60 percent and 40 percent of the partnership's capital and profits. At the beginning of the 2015, their bases in their partnership interests were $18,000 and $12,000, respectively. During the year, the partnership had the following items of income: partnership ordinary income, $30,000; long-term capital gains, $10,000; and tax-exempt income from municipal bond interest, $5,000. The partnership distributed $12,000 to Bobbie and $8,000 to Fran. Their respective bases in their partnership interests at the end of 2015 were:

a.         Bobbie: $45,000; Fran: $30,000

b.         Bobbie: $42,000; Fran: $28,000

c.          Bobbie: $37,000; Fran: $18,000

d.         Bobbie: $30,000; Fran: $20,000

e.          Bobbie: $33,000; Fran: $22,000

PLEASE EXPLAIN

Explanation / Answer

Answer

  

e . bobbie 33000 fran 22000

particular bobbie fran 1 opening interest in partnership 18000 12000 2 add . share of income 27000 18000 3 less . partnership distributed 12000 8000 4 closing interest in partnership as at the end 33000 22000

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