Problem: The RB Partnership is owned equally by Rob and Bob, Bob's basis is $14,000 at the beginning of the tax year. Rob's basis is $9,000 at the beginning of the year. RB reported the following income and expenses for the current tax year:
Sales revenue $130,000
Cost of sale 45,000
Guaranteed payment to Rob 24,000
Depreciation expense 12,500
Utilities 15,000
Rent expense 16,000
Interest income 3,000
Tax-exempt interest income 4,500
Payment to Mount Vernon Hospital for
Bob's medical expenses 10,000
Q1. Determine the ordinary partnership income and separately state items for the partnership
Q2. Calculate Bob's basis in his partnership interest at the end of the tax year. What items should Bob report on his Federal income tax return?
Q3. Calculate Rob's basis in his partnership interest at the end of the tax year. What items should Rob report on his Federal income tax return?