On January 1, 20X9, Mr The $3,000 of Interest Was Paid on a $60,000 Loan

On January 1, 20X9, Mr. Blue and Mr. Grey each contributed $100,000 to form the B&G general partnership. Their partnership agreement states that they will each receive a 50% profits and loss interest. The partnership agreement also provides that Mr. Blue will receive an annual $36,000 guaranteed payment. B&G began business on January 1, 20X9. For its first taxable year, its accounting records contained the following information. $\begin{array}{|l|r|r|r|r|r|r|r|}\hline&& \text { Jane } & 25 \% & \text { Joe } & 45 \% & \text { Jack } & 30 \% \\\hline\text { Initial Basis}&&& 5,000&& 10,000 && 2,000 \\\hline \text { Ordinary Inc. } & 100,000 & & 25,000 & & 45,000 & & 30,000 \\\hline 1231 \text { gain } & 15,000 & & 3,750 & & 6,750 & & 4,500 \\\hline \text { Tax-exempt income } & 3,000 & & 750 & & 1,350 & & 900 \\\hline \text { Additional Debt } & 12,000 & & 3,000 & & 5,400 & & 3,600 \\\hline \text { Charitable contribution } & (25,000) & & (6,250) & & (11,250) & & (7,500) \\\hline \text { Total } & 105,000 & & 31,250 & & 57,250 & & 33,500 \\\hline\end{array}$ The $3,000 of interest was paid on a $60,000 loan made to B&G by Key Bank on June 30, 20X9. B&G repaid $10,000 of the loan on December 15, 20X9. Neither of the partners received a cash distribution from B&G in 20X9.
Complete the following table related to Mr. Blue's interest in B&G partnership: $$\begin{array}{l}\text { PARTNERS' OUTSIDE BASIS }\\\begin{array} { | l | r | l | r | l | r | } \hline { \text { Troy } } && { \text { Peter } } & &{ \text { Sarah } } \\\hline \text { Cash } & 3,000 & \text { Cash } & 5,000 & \text { Cash } & 2,000 \\\hline \text { Inventory } & 5,000 & \text { Land } & 20,000 & \text { Equipment } & 3,500 \\\hline \text { Building } & 10,000 & \text { Relief of Debt } & ( 12,000 ) & \text { AR } & 1,000 \\\hline \text { Relief of Debt } & ( 10,000 ) & \text { Debt } & 8,500 & \text { Reliet of Debt } & ( 23,000 ) \\\hline \text { Debt } & 8,500 & & & \text { Debt } & 28,000 \\\hline \text { Preliminary Basis } & 16,500 & \text { Preliminary Basis } & 21,500 & \text { Preliminary Basis } & 11,500 \\\hline \text { Gain(Loss) } & - & \text { Gain(Loss) } & & \text { Gain(Loss) } &- \\\hline \text { Outside Basis } & 16,500 & \text { Outside Basis } & 21,500 & \text { Outside Basis } & 11,500 \\\hline\end{array}\end{array}$$