Partner Jamie has a basis of $10,000 in a partnership at the beginning of the year.She receives $5,000 in cash distributions,her distributive share of income is $3,000,and she receives an equipment distribution with a basis of $6,000 (FMV $12,000).Jamie's basis in her partnership interest at the end of the year is:

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Jamie's initial basis is $10,000. She receives $5,000 in cash distributions, reducing her basis to $5,000. Her distributive share of income is $3,000, increasing her basis to $8,000. The equipment distribution reduces her basis by $6,000 (its basis), leaving her with a $2,000 basis at year-end.

Partner Jamie Has a Basis of $10,000 in a Partnership