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Jerry, a partner with 30% capital and profit interest, received his Schedule K-1 from Plush Pillows, LP
Jerry, a partner with 30% capital and profit interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry's tax basis in his partnership interest was $58,000. His current year Schedule K-1 reported an ordinary loss of $23,000, long-term capital gain of $3,800, qualified dividends of $2,800, $1,300 of non-deductible expenses, a $18,000 cash contribution, and a reduction of $4,800 in his share of partnership debt. What is Jerry's adjusted basis in his partnership interest at the end of the year?
Multiple Choice
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$35,000.
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$41,600.
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$53,500.
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$58,300.
Expert Solution
Answer to above question is $53500.
Jerry tax basis is increased by long term capital gain, qualifying dividend ,and his cash contribution .and is reduced by share of partner ship debt, non deductible expenses ordinary expenses
(58000+18000+3800+2800-4800-1300-23000)
=$53500 Answer
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