Reference no: EM132915284

Problem 1: Joe Quick and Jane Reddy are equal partners in the Quick and Reddy partnership. On the first day of the current taxable year, Joe's adjusted basis in his partnership interest is $10,000 and Jane's adjusted basis is $2,000. During the year, Joe had withdrawals of $25,000 and Jane had withdrawals of $20,000. Given the following partnership activity for the year, determine each partner's adjusted basis in Quick and Reddy at the end of the taxable year.

Ordinary income                                      $60,000
Section 1231 gains                                  1,000
Interest income from municipal bonds             500
Short-term capital losses                             2,000
Charitable contributions                                3,000