Steve's basis in his SAW Partnership interest is $200,000 at the beginning of the tax year, including all adjustments.
His allocable share of partnership items are as follows: ($120,000) of ordinary loss, $6,000 tax-exempt interest income, and a $14,000 long-term capital gain. In addition, the LLC distributed $20,000 of cash to Steve during the year. During the year, Steve's share of partnership debt increased by $10,000. Steve's ending basis in his LLC interest is $80,000.

Question

Quizplus · Accepted Answer

It is not possible for Steve's ending basis in his LLC interest to be lower than his beginning basis if he received cash distributions and his share of partnership debt increased during the year. This suggests that there may be an error in the calculations or information provided.

Steve's Basis in His SAW Partnership Interest Is $200,000 at the Beginning