Reference no: EM132612687
On January 1, 2019, Bernie and Amy formed a partnership to sell their cheesecakes. The partners each contributed $10,000 and agreed that all income and losses would be shared equally. For the fiscal period January 1 to December 31, 2019, the following information is available.
(1) The partnership earned income for tax purposes of $80,000. Included in this amount is a taxable capital gain of $35,000.
(2) The partnership made charitable donations of $1,500.
(3) Bernie took draws totalling $5,000.
(4) Bernie contributed additional capital of $20,000 to the partnership.
Problem 1: The adjusted cost base of Bernie's partnership interest at January 1, 2020, is:
a. $82,500
b. $46,750
c. $81,750
d. $64,250