Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2015, the adjusted
Question:
Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2015, the adjusted basis in her YZ interest was $95,000. For 2015, YZ generated a $210,000 business loss, earned $14,600 dividend and interest income on its investments, and recognized a $6,200 capital gain. YZ made no distributions to its partners and had no debt. In 2016, YZ generated $7,000 ordinary business income and $18,000 dividend and interest income. The partnership made no distributions. At the end of the year, YZ had $21,000 debt.
a. Compute Zelda’s adjusted basis in her YZ interest before loss deduction in 2016.
b. Compute Zelda’s adjusted basis in her YZ interest at the end of 2016.
Principles of Taxation for Business and Investment Planning 2019 Edition
ISBN: 9781260161472
22nd edition
Authors: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan