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:

Question

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Jamie's initial basis is $10,000. She receives $3,000 as her share of income, increasing her basis to $13,000. Cash distributions of $5,000 reduce her basis to $8,000. The equipment distribution reduces her basis by $6,000 (the basis of the equipment), resulting in a final basis of $2,000.

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