Reference no: EM132909116

Jayanthi and Krish each own a 50 percent general partner interest in the JK Partnership. The following information is available regarding the partnership's 2019 activities:

Sales revenue$500,000
Selling expenses 200,000
Depreciation expense 30,000
Long-term capital gain 9,000
Nondeductible expenses 2,000
Partnership debts, beginning of the year 100,000
Partnership debts, end of the year 120,000
Partnership distributions:
Jayanthi 50,000
Krish 50,000

Required:

Problem a-1. Calculate the partnership's ordinary (nonseparately stated) income.

Problem a-2. Indicate which items must be separately stated by selecting "Yes" and which items must not be separately stated by selecting "No".

Problem b. Calculate Jayanthi's allocable share of partnership items.

Problem c. If Jayanthi has no other sources of taxable income, what is her total gross income for 2019?

Problem d. At the beginning of the year, Jayanthi's adjusted tax basis in her partnership interest was $25,000. Calculate her ending adjusted tax basis in her partnership interest.