Barb and Chuck each have a 50% ownership in Wren Partnership.Each partner has a partnership interest basis of $100,000.Wren's taxable income for the current year is $80,000,and it distributes $50,000 to each partner.Barb's basis in the partnership interest at the end of the year is:
A)$50,000.
B)$90,000.
C)$100,000.
D)$140,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Barb's basis in the partnership interest at the end of the year is $90,000. This is because her basis of $100,000 is increased by her share of the partnership's taxable income ($40,000) and decreased by her share of the partnership's distributions ($50,000).

Barb and Chuck Each Have a 50% Ownership in Wren