Elena owns 25% of a partnership that reported net income of $100,000 for the year.Elena's basis in her partnership interest is $20,000 at the beginning of the year.During the year $5,000 was distributed to Elena from the partnership.What is Elena's basis at the end of the year?
A)$40,000
B)$30,000
C)$25,000
D)$20,000

Question

Quizplus · Accepted Answer

Elena's basis at the end of the year is calculated by starting with her initial basis ($20,000), adding her share of the partnership's net income (25% of $100,000 = $25,000), and then subtracting any distributions she received ($5,000). Therefore, her ending basis is $20,000 + $25,000 - $5,000 = $40,000.

Elena Owns 25% of a Partnership That Reported Net Income