Question

Wayne has a beginning basis in a partnership of $46,000. His share of income and expense from the partnership consists of the following amounts: Ordinary income $86,000, Guaranteed payment 24,000, Long-term capital gain 31,000, §1231 gain 8,600, Charitable contributions 4,000, §179 expense 36,000, Cash distribution 12,000.

Beginning basis = $46,000

Guaranteed payment                               = $24,000

Long-term Capital gain                           = $31,000

1231 gain                                                = $8,600

                                                                   $109,600

Charitable contributions                         = ($4,000)

179 Expense                                            = ($36,000)

Cash distribution                                     = ($12,000)

End of year basis                                   = $57,600

I was told my answer of $57,600 was incorrect, any advice?

Answer 1

Answer) Ending Basis is determined as below:

Beginning Basis	46,000
Income	24,000
LTCG	31,000
1231 Gain	8,600
Charitable Contribution	-4,000
Section 179	-36,000
Cash Distribution	-12,000
Ending Basis	$57,600

$57,600 is the correct answer.

If you need self employment income, that is determined below:

Ordinary Income	86,000
Guaranteed Payment	24,000
Section 179	-36,000
Self-employment Income	$74,000

Thanks