In the present year the doe partnership received revenues

Reference no: EM13370263

In the present year, the DOE Partnership received revenues of 100,000 and paid the subsequent amounts: 20,000 in rent and utilities, a 30,000 guaranteed payment to 60% partner Dave, 6,000 to partner Ethan for consulting services, and 10,000 as a distribution to partner Olivia. In addition, the partnership earned 4,000 of interest income through year. Dave's basis in his partnership interest was 35,000 at the starting of the year, and include a 10,000 share of partnership liabilities. The partnership created 30,000 of liabilities through the year.

a. How much income must Dave report for tax year and what is character of the income?

b. Evaluate what is Dave's basis in his partnership interest at the end of tax year?

Reference no: EM13370263

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