Reference no: EM131286305
Partnership Taxable Income Partner D is a 10 percent general partner in ABCD Partnership. The partnership’s financial records for the current tax year reveal the following:
Gross receipts from sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $820,000
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (540,000)
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,000)
Net income from rental real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,000
Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Business meals and entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,200)
Section 1231 loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,500)
D’s outside basis in his partnership interest was $125,000 at the beginning of the tax year.
1. Using Form 1065, page 1 as a guide, calculate the partnership’s ordinary income/loss for the current tax year.
2. Determine D’s capital account the partnership at the end of the tax year.
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