Partner's Basis
Response to the following problem:
At the beginning of the year, Bruce's basis in his 40% interest in B&R partnership is $11,000. That year, on Schedule K, B&R reports ordinary income of $6,000, dividend income of $12,400, and charitable contributions of $16,000. During the year, B&R's debt decreased by $25,000. Discuss the tax consequences of these partnership activities on Bruce's personal income tax return, and compute his basis in B&R partnership at the end of the year.