Ryan is a 25% partner in the ROCC Partnership. At the beginning of the tax year, Ryan’s basis in the partnership interest was $90,000, including his share of partnership liabilities. During the current year, ROCC reported net ordinary income of $100,000 and tax-exempt interest of $15,000. In addition, ROCC distributed $10,000 to each of the partners ($40,000 total). At the end of the year, Ryan’s share of partnership liabilities decreased by $10,000.

Required:

a). What is Ryan’s basis in the partnership interest at the end of the year?
b). Calculate the amount of income to be recognized on Ryan’s F1040 this year.

Answer rating: 100% (QA)

a Basis at the beginning of the tax year90000 Add Share of liabilities... View the full answer