Dean is a 25% partner in Target Partnership. Dean’s tax basis in Target on January 1, 2010, was $20,000. At the end of 2010, Dean received a nonliquidating cash distribution of $8,000 from Target. Target’s 2010 accounts recorded the following items:

Municipal bond interest income $12,000 Ordinary income 40,000 What was Dean’s tax basis in Target on December 31, 2010?

a. $15,000

b. $23,000

c. $25,000

d. $30,000 MODULE 37 PARTNERSHIPS TAXATION 951