What is the amount of ordinary income for the partnership

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The AB partnership, a cash method, calendar year partnership, had the following income and expenses for the past calendar year. A and B are equal partners.

Revenue from business operations $130
Ordinary operating business expenses 40
Depreciation on machinery 30
Charitable gifts 20
Gain on sale of business equipment $20 is ordinary income under Sec. 1245
$10 is Sec. 1231 gain 30
Short-term capital gain on stock sale 10
Interest on tax-exempt bonds 40
Dividends received on stock 20
Gain on sale of land held for investment
For 4 years 100

Problem a. What is the amount of ordinary income for the partnership?

Problem b. What is the net income of the partnership that would appear in the Analysis of Net Income of Form 1065?

Problem c. A's adjusted basis for his partnership interest was $20 at the beginning of this partnership tax year. On March 1 the partnership distributed $40 to A. What would A's adjusted basis be at the end of the year?

Reference no: EM132935084

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