Bases for the partnership interests at the beginning of the


Mary and Gary are partners in the MG Partnership. Mary owns a 40% capital, pofits, and loss interest. Gary owns the remaining interest. Both materially participate in the partnership activities. At the beginning of the current year, MG's only liabilities are $30,000 in accounts payable, which remain outstanding at year-end. In November, MG borrows $100,000 on a nonrecourse basis from First Bank. The loan is secured by property with a $200,000 FMV. These are MG's only liabilities at year-end. Bases for the partnership interests at the beginning of the year are $80,000 for Mary and $120,000 for Gary after considering the impact of liabilities but before considering operatons. MG has $200,000 ordinary loss during the current year. How much loss can Mary and Gary recognize?

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Accounting Basics: Bases for the partnership interests at the beginning of the
Reference No:- TGS01212498

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