Question: Dan is a general partner in Partnership PPP. He has 10% capital and profits interest in the partnership. His basis in his partnership interest at

Dan is a general partner in Partnership PPP. He has 10% capital and profits interest in the partnership. His basis in his partnership interest at the beginning of the year was $350,000. Prior to this year, Partnership PPP reported no liabilities: however, in July the current year, the partnership borrowed $100,000 from a local bank. For the current year, Partnership PPP reported the following items.

Nonseparately stated ordinary income $200,000

Interest income on State of Wisconsin Bond $15,000

Charitable Contribution $7,000

Health insurance premium paid on behalf of Paul $5,000

Dans basis in his partnership interest at the end of the current year is:

A. $380,800

B. $375,800

C. $366,500

D. $365,800

E. None of the Above

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