ABC partnership s Calendar year records show the following 20x1. 20x2 Net income

Question

ABC partnership s Calendar year records show the following 20x1. 20x2
Net income N/ a. $5000 Recourse debt. $30000. $36000 No recourse debt. $60000. $52000
ABC partners owns and rents out office building. All of its debt is owned to unrelated parties. L has 10% ownership interest and is alloyed 10% of all profits and losss. L is a limited partner and has $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 ABC partnership s Calendar year records show the following 20x1. 20x2
Net income N/ a. $5000 Recourse debt. $30000. $36000 No recourse debt. $60000. $52000
ABC partners owns and rents out office building. All of its debt is owned to unrelated parties. L has 10% ownership interest and is alloyed 10% of all profits and losss. L is a limited partner and has $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 20x1. 20x2
Net income N/ a. $5000 Recourse debt. $30000. $36000 No recourse debt. $60000. $52000
ABC partners owns and rents out office building. All of its debt is owned to unrelated parties. L has 10% ownership interest and is alloyed 10% of all profits and losss. L is a limited partner and has $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

How much basis does L have in the partnership at the end of 20x2

The begining basis = $ 300 , share in net profit/loss = 10%

At end of 20x2 , the L have = Net Income * 10% + begning basis

=> 5000 *10% + 300 = $ 800 basis. (option D)

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