Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 40

Phil Williams and Liz Johnson are 60% and 40% partners, respectively, in Williams Johnson Partnership. Their beginning basis is $33,000 for Phil and $31,000 for Liz. The partnership had the following activity during the year:
Expenses:
a. Calculate the ordinary income for the partnership and prepare page 1 of Form 1065.
b. Prepare page 4 of Form 1065.
c. What is the ending basis for Phil Williams?
d. What is the ending basis for Liz Johnson?