Jason purchased a 20 percent interest in JKL Partnership for $20,000 at the beginning of the year.At year-end, the partnership reported net income of $15,000 and distributed $2,000 cash to Jason.What is Jason's year-end basis?
A)$20,000
B)$21,000
C)$23,000
D)$33,000

Question

Quizplus · Accepted Answer

Jason's basis is increased by his share of partnership income ($15,000 x 20% = $3,000) and decreased by the cash distribution ($2,000). Therefore, his year-end basis is $20,000 + $3,000 - $2,000 = $21,000.

Jason Purchased a 20 Percent Interest in JKL Partnership for $20,000