GP Partnership, a calendar-year partnership, is owned by Grant Gilbert (70%) and Peter Paulson (30%). At the beginning of 2023, Grants basis in his GP Partnership interest was $400,000, and Peters basis in his GP Partnership interest was $250,000. During 2023, GP Partnership had the following items of income and (expense):

Gross receipts from sales 2,600,000 Cost of goods sold (1,200,000) Long-term capital gain 45,000 Tax-Exempt Interest 10,000 Advertising expenses (128,000) MACRS Depreciation (428,000) Charitable Contribution (11,000) Qualified dividends income 30,000 Rent expenses (109,000) Salaries (286,000)

In addition to the above items, GP Partnerships liabilities decreased by $60,000. Please show your work and explain your calculation for the following questions.

a) (5 points) What is GP Partnerships 2023 ordinary business income or loss, and how much of the ordinary income or loss is allocated to Grant and Peter?

b) (5 points) What items of income and expense must GP Partnership separately report, and what is Grant and Peters allocable share of the separately stated items? c) (6 points) What are Grants and Peters outside bases in their GP Partnership interests at the end of 2023?