At the beginning of 20X3, Margarets adjusted basis in her 30 percent interest in MP Partnership, a

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Question:

At the beginning of 20X3, Margaret’s adjusted basis in her 30 percent interest in MP Partnership, a calendar year general partnership, was $10,000. During 20X3, Margaret did not make any additional contributions to MP Partnership, and Margaret’s share of MP Partnership liabilities did not change. During 20X3, MP Partnership distributed $5,000 to Margaret, and MP Partnership had the following items of partnership income, deduction, gain and loss for 20X3:

Nonseparately stated taxable income $15,000

Tax-exempt interest $6,000

Capital loss ($20,000)

What is Margaret’s adjusted basis in her partnership interest in MP Partnership at the end of 20X3?

a. 0.

b. $10,000.

c. $15,000.

d. $25,000.