Partner Tami (a 20% partner)had the following items reported to her on a partnership Schedule K-1: Tami had a basis in her partnership interest of $14,000 at the beginning of the year.Additionally,the partnership has recourse liabilities of $100,000 outstanding at the end of the year.What is Tami's basis in her partnership interest at the end of the year?

Question

Partner Tami (a 20% partner)had the following items reported to her on a partnership Schedule K-1:  Tami had a basis in her partnership interest of $14,000 at the beginning of the year.Additionally,the partnership has recourse liabilities of $100,000 outstanding at the end of the year.What is Tami's basis in her partnership interest at the end of the year?

Quizplus · Accepted Answer

To calculate Tami's basis in her partnership interest at the end of the year, we need to take into account the following:

1. Tami's beginning basis in her partnership interest: $14,000
2. Tami's share of the partnership's income: $16,000 x 20% = $3,200
3. Tami's share of the partnership's loss: $8,000 x 20% = ($1,600)
4. Tami's share of the partnership's liabilities: $100,000 x 20% = $20,000

Using these amounts, we can calculate Tami's ending basis as follows:

Beginning basis + Share of income - Share of loss + Share of liabilities = Ending basis

$14,000 + $3,200 - $1,600 + $20,000 = $35,600

Therefore, Tami's basis in her partnership interest at the end of the year is $31,200 (which is 20% of $35,600). The correct answer is D.

Partner Tami (A 20% Partner)had the Following Items Reported to Her