Barb and Chuck each have a 50% ownership in Wren Partnership.Each partner has a partnership interest basis of $175,000.Wren's taxable income for the current year is $100,000,and it distributes $75,000 to each partner.Barb's basis in the partnership interest at the end of the year is:
A)$0.
B)$100,000.
C)$150,000.
D)$175,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Barb's basis at the beginning of the year is $175,000. She receives a $75,000 distribution, leaving her with a remaining basis of $100,000. Since her share of the taxable income is $50,000 ($100,000 x 50%), her basis increases to $150,000 ($100,000 + $50,000). Therefore, the correct answer is C.

Barb and Chuck Each Have a 50% Ownership in Wren