Determine the year-end adjusted basis of Roberto's 1/2 interest in the Halifax Partnership. At the beginning of the year, Roberto's adjusted basis is $80,000. The net operating profit of the partnership is $90,000. Also, Halifax distributes $15,000 of cash to Roberto.
A)$65,000
B)$110,000
C)$140,000
D)$155,000
E)$185,000

Question

Quizplus · Accepted Answer

Roberto's year-end adjusted basis is calculated by starting with his initial basis of $80,000, adding his share of the net operating profit ($90,000 / 2 = $45,000), and then subtracting the cash distribution of $15,000. This results in an adjusted basis of $80,000 + $45,000 - $15,000 = $110,000.

Determine the Year-End Adjusted Basis of Roberto's 1/2 Interest in the Halifax