Reference no: EM132702994

Problem - Khushboo's basis in her 30% interest in the Rishi Partnership is $46,000 at the start of the current year. During the current year, Rishi reports ordinary business income of $70,000. Rishi also makes a $16,000 guaranteed payment and $10,000 cash distribution, both to Khushboo. How much income will Khushboo recognize from these transactions and what will Khushboo's basis be at the end of the current year?

a. Basis of $57,000 and income of $37,000

b. Basis of $41,000 and income of $21,000

c. Basis of $90,000 and income of $96,000

d. Basis of $57,000 and income of $21,000

e. Basis of $41,000 and income of $37,000