abc partnership\'s calendar year record shows: 20x1 net income NA recourse debt
ID: 2600782 • Letter: A
Question
abc partnership's calendar year record shows: 20x1 net income NA recourse debt 30000 non recourse debt 60000 ...in 20x2 net income: 5000 : recourse debt 36000 : non recourse debt 52000 ABC partnership owns and rents out office buildings. All debt is owed to unrelated parties. L has 10% ownership interest and is allocated 10% of all profits and losses. L is a limited partner and has a $300 basis in the partnership at the beginning of 20x2. How much basis does L have in the partnership at the end of 20x2? A) 0 B) 500 C) 700 D) 800
Explanation / Answer
20X1
Net income = NA
Recourse debt = 30000
Non recourse debt = 60000
20X2
Net income = 5000
Recourse debt = 36000
Non recourse debt = 52000
L's basis in the partnership at the beginning of 20x2 = $300
Plus 10% of the 5000 profit = $500
Total basis of L in the = $800
L is a limited partner thus his basis is limited to his share of capital invested.
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