A general partnership had the following information at the end of each of the ye

Question

A general partnership had the following information at the end of each of the years 20x 0 and 20x1
Current Liabilities. $20000. $20000 Long term liabilities. $50000. $50000 Net income (or loss). N/a. ($40000)
All liabilities are recourse debt and partner M guaranteed all the long term liabilities. M a 10% owner had a $10000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal durning 20x0 or 20x2. How much is Ms basis at the end of 20x01?
A $6000 B $10000 C $33000 D$51000 A general partnership had the following information at the end of each of the years 20x 0 and 20x1
Current Liabilities. $20000. $20000 Long term liabilities. $50000. $50000 Net income (or loss). N/a. ($40000)
All liabilities are recourse debt and partner M guaranteed all the long term liabilities. M a 10% owner had a $10000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal durning 20x0 or 20x2. How much is Ms basis at the end of 20x01?
A $6000 B $10000 C $33000 D$51000
Current Liabilities. $20000. $20000 Long term liabilities. $50000. $50000 Net income (or loss). N/a. ($40000)
All liabilities are recourse debt and partner M guaranteed all the long term liabilities. M a 10% owner had a $10000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal durning 20x0 or 20x2. How much is Ms basis at the end of 20x01?
A $6000 B $10000 C $33000 D$51000

Explanation / Answer

M basis at the end of 20x1 = 10000 - 10% of 40000

= $6000

Correct option will be option A.

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