Question

George and Martha are equal partners in G&M Partnership. At the beginning of the current tax year, the adjusted basis of George's partnership interest was $29,800, which included his share of $34,000 of partnership liablities. During the tax year, the following information applied to G&M:

Operating loss $23,000

Interest and dividend income $10,000

Partnership liabilities at end of year $29,000

What was the basis of George's partnership interest at year-end?

$15,800

$23,300

$20,800

$3,800

Answer 1

Answer) $20800

Beginning Basis in Partnership	29800
Less: 50% of Operating Loss	-11500
Add: 50% of Interest and Dividend Income	5000
Less: 50% of Decrease in Allocable share of	-2500
Partnership Liabilities ((34000 - 29000) x 50%)
George's partnership interest at year end	20800