Paul and Wayne are also owners of the PW Partnership. Paul's basis was $30,000 and Wayne's basis was $22,000 at the beginning of the year. PW Partnership had the following income and expense items:

Sales	$ 330,000
cost of goods sold	220,000
Guaranteed payment to Paul	40.000
Rental costs	24,000
Depreciation	33,000
Interest expenses	4,000
tax free income	3,000
Health insurance premiums for Paul	3,600
Health insurance premiums for Wayne	3,600

The non-financial information of PW Partnership is as follows:

• Name: PW Association
• Address: 5 Furniture Street, Anywhere, NC 28777
• A: 56-1234567
• Association start date: 01/01/10
• Commercial Code: 442110
• Main business activity: Retail trade
• Main Product or Service: Furniture
• Follow the cash method of accounting

 Required

Calculate Wayne's basis in his participation in the partnership.

Answer rating: 100% (QA)

To calculate Waynes basis in his participation in the partnership we need to consider the income exp... View the full answer