Lorrie is a 30% partner in the LAP Partnership. At the beginning of the year, her basis in the Partnership was 80,000. During the current tax year, Lorrie contributed 15,000 to the Partnership. At the end of the year, the Partnership reported Ordinary Business Income of $200,000 on Form 1065, and distributed $25,000 cash to Lorrie.

Other Partnership items included:

- Guaranteed payments to each of the 3-partners(Lorrie, Amber, and Pat)

- Exempt Interest income - $15,000

- Charitable contributions – Cash 10,000

- Decrease in Partnership debt/liability 30,000

Required: 

Calculate Lorrie’s Basis in the Partnership interest at the end of the Partnership year.

Answer rating: 100% (QA)

Basis at the beginning of the tax year ... View the full answer