Refer to the facts in the preceding problem. Ted is a 20 percent general partner in Bevo.
Bevo Partnership had the following financial activity for the year:
$$\begin{array} { l c }
\text { Gross receipts from sales } & \$ 860,000 \
\text { Cost of goods sold } & ( 390,000 ) \
\text { Operating expenses } & ( \mathbf { 1 8 0 , 0 0 0 } ) \
\text { Business meals and entertainment } & ( 20,000 ) \
\text { Section 1231 gain on equipment sale } & \mathbf { 5 , 0 0 0 } \
\text { Distribution to partners } & ( \mathbf { 7 5 , 0 0 0 } )
\end{array}$$ a. Compute Ted's share of partnership ordinary income and separately stated items.
b. If Ted's adjusted basis in his Bevo interest was $30,000 at the beginning of the year, compute his adjusted basis at the end of the year. Assume that Bevo's debt did not change during the year.
c. How would your basis computation change if Bevo's debt at the end of the year as $50,000 less than its debt at the beginning of the year?

Question

Refer to the facts in the preceding problem. Ted is a 20 percent general partner in Bevo.
Bevo Partnership had the following financial activity for the year:
 $$\begin{array} { l c } 
\text { Gross receipts from sales } & \$ 860,000 \
\text { Cost of goods sold } & ( 390,000 ) \
\text { Operating expenses } & ( \mathbf { 1 8 0 , 0 0 0 } ) \
\text { Business meals and entertainment } & ( 20,000 ) \
\text { Section 1231 gain on equipment sale } & \mathbf { 5 , 0 0 0 } \
\text { Distribution to partners } & ( \mathbf { 7 5 , 0 0 0 } )
\end{array}$$ a. Compute Ted's share of partnership ordinary income and separately stated items.
b. If Ted's adjusted basis in his Bevo interest was $30,000 at the beginning of the year, compute his adjusted basis at the end of the year. Assume that Bevo's debt did not change during the year.
c. How would your basis computation change if Bevo's debt at the end of the year as $50,000 less than its debt at the beginning of the year?

Quizplus · Accepted Answer

The Answer of Refer to the facts in the preceding problem. Ted is a 20 percent general partner in Bevo.
Bevo Partnership had the following financial activity for the year:
 $$\begin{array} { l c } 
\text { Gross receipts from sales } & \$ 860,000 \
\text { Cost of goods sold } & ( 390,000 ) \
\text { Operating expenses } & ( \mathbf { 1 8 0 , 0 0 0 } ) \
\text { Business meals and entertainment } & ( 20,000 ) \
\text { Section 1231 gain on equipment sale } & \mathbf { 5 , 0 0 0 } \
\text { Distribution to partners } & ( \mathbf { 7 5 , 0 0 0 } )
\end{array}$$ a. Compute Ted's share of partnership ordinary income and separately stated items.
b. If Ted's adjusted basis in his Bevo interest was $30,000 at the beginning of the year, compute his adjusted basis at the end of the year. Assume that Bevo's debt did not change during the year.
c. How would your basis computation change if Bevo's debt at the end of the year as $50,000 less than its debt at the beginning of the year?

Refer to the Facts in the Preceding Problem A Compute Ted's Share of Partnership Ordinary Income and Separately