The XL Partnership is formed on January 1, 2020. Xena is entitled to 60 percent of the Partnership income, while Larry is entitled to the remaining 40 percent.
Xena's original investment is $125,000. Later in 2020, she makes a further contribution of $75,000. Also during 2020, she withdraws $40,000 in anticipation of the Partnership profits.
During the taxation year ending December 31, 2020, the XL Partnership has the following sources of income: Determine the adjusted cost base of Xena's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Xena's 2020 Net Income For Tax Purposes as a consequence of her interest in the XL Partnership.

Question

The XL Partnership is formed on January 1, 2020. Xena is entitled to 60 percent of the Partnership income, while Larry is entitled to the remaining 40 percent.
Xena's original investment is $125,000. Later in 2020, she makes a further contribution of $75,000. Also during 2020, she withdraws $40,000 in anticipation of the Partnership profits.
During the taxation year ending December 31, 2020, the XL Partnership has the following sources of income:  Determine the adjusted cost base of Xena's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Xena's 2020 Net Income For Tax Purposes as a consequence of her interest in the XL Partnership.

Quizplus · Accepted Answer

The Answer of The XL Partnership is formed on January 1, 2020. Xena is entitled to 60 percent of the Partnership income, while Larry is entitled to the remaining 40 percent.
Xena's original investment is $125,000. Later in 2020, she makes a further contribution of $75,000. Also during 2020, she withdraws $40,000 in anticipation of the Partnership profits.
During the taxation year ending December 31, 2020, the XL Partnership has the following sources of income:  Determine the adjusted cost base of Xena's partnership interest on December 31, 2020, and at January 1, 2021. In addition, determine the amount that would be included in Xena's 2020 Net Income For Tax Purposes as a consequence of her interest in the XL Partnership.

The XL Partnership Is Formed on January 1, 2020