On January 1, 2020, Rachel and Roberta form the Racherta Partnership. The partnership agreement provides Roberta with a 40 percent share of profits and losses. Roberta initially contributes $52,500 and makes a further contribution of $30,240 on May 15, 2020. She withdraws $16,800 on August 31, 2020. The Racherta Partnership has the following sources of income for the year ending December 31, 2020: Determine the adjusted cost base of Roberta's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Roberta's 2020 Net Income For Tax Purposes as a consequence of her interest in the Racherta Partnership.

Question

On January 1, 2020, Rachel and Roberta form the Racherta Partnership. The partnership agreement provides Roberta with a 40 percent share of profits and losses. Roberta initially contributes $52,500 and makes a further contribution of $30,240 on May 15, 2020. She withdraws $16,800 on August 31, 2020. The Racherta Partnership has the following sources of income for the year ending December 31, 2020:  Determine the adjusted cost base of Roberta's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Roberta's 2020 Net Income For Tax Purposes as a consequence of her interest in the Racherta Partnership.

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The Answer of On January 1, 2020, Rachel and Roberta form the Racherta Partnership. The partnership agreement provides Roberta with a 40 percent share of profits and losses. Roberta initially contributes $52,500 and makes a further contribution of $30,240 on May 15, 2020. She withdraws $16,800 on August 31, 2020. The Racherta Partnership has the following sources of income for the year ending December 31, 2020:  Determine the adjusted cost base of Roberta's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Roberta's 2020 Net Income For Tax Purposes as a consequence of her interest in the Racherta Partnership.

On January 1, 2020, Rachel and Roberta Form the Racherta