Higlo Paints is a partnership that reports an operating income of $50,000 in the current year. Higlo also has a $20,000 Section 1231 gain from the sale of a building and $10,000 in nondeductible expenses. Bernice owns 20% of Higlo and withdraws $5,000 from the partnership during the current year. Bernice's basis will increase by:
A)$5,000
B)$7,000
C)$9,000
D)$10,000
E)$12,000

Question

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The Answer of Higlo Paints is a partnership that reports an operating income of $50,000 in the current year. Higlo also has a $20,000 Section 1231 gain from the sale of a building and $10,000 in nondeductible expenses. Bernice owns 20% of Higlo and withdraws $5,000 from the partnership during the current year. Bernice's basis will increase by:
A)$5,000
B)$7,000
C)$9,000
D)$10,000
E)$12,000

Higlo Paints Is a Partnership That Reports an Operating Income