T purchased a 60 percent interest in partnership Z for $100,000 on January 2 of the current year.During the year, the partnership had ordinary income of $50,000, tax-exempt income of $30,000, and made a cash distribution to owners of $6,000.T's basis in his partnership interest at the end of the year is

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T's initial basis in the partnership was $100,000 for a 60% interest, which makes the total partnership value $166,667 ($100,000/60% = $166,667).

T's share of the partnership's income was $50,000 x 60% = $30,000.

T's share of the partnership's tax-exempt income was $30,000 x 60% = $18,000.

The cash distribution of $6,000 reduces T's basis in the partnership to $94,000 ($100,000 - $6,000).

Therefore, T's ending basis in the partnership is $144,400 ($94,000 + $30,000 + $18,000).

T Purchased a 60 Percent Interest in Partnership Z for $100,000