Partnership interest at the end of the year


Question 1: During the current year, ALF Partnership reported the following items of receipts and expenditures: $200,000 sales, $10,000 utilities, $12,000 rent, $50,000 salaries to employees, $30,000 guaranteed payment to partner Lloyd, investment interest income of $3,000, a charitable contribution of $5,000, and a distribution of $10,000 to partner Frank. Arnold is a 40% partner. What items will be reflected on Arnold's Schedule K-1?

Question 2: Denise invested $30,000 this year to purchase a 20% interest in the DEF Partnership. The partnership reported $100,000 of net income from operations, a $6,000 short-term capital loss, and a $2,000 charitable contribution. In addition, the partnership distributed $10,000 to Denise and $20,000 each to partners Ed and Fran. Assuming the partnership has no beginning or ending liabilities, what is Denise's basis in her partnership interest at the end of the year?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Partnership interest at the end of the year
Reference No:- TGS01619538

Now Priced at $25 (50% Discount)

Recommended (96%)

Rated (4.8/5)