Jim's basis in his partnership is $200,000. His share of the 2014 income is $60,000. The partnership gave him a $75,000 distribution in 2014. What is his new basis in the partnership and what is his taxable income?

Question

Quizplus · Accepted Answer

Jim's new basis would be his original basis ($200,000) plus his share of the income ($60,000) minus the distribution he received ($75,000). 
Therefore, his new basis is $185,000. 
His taxable income is just his share of the income, which is $60,000.

Jim's Basis in His Partnership Is $200,000