Ask Question
29 August, 01:04

The Salt and Pepper Partnership was formed in January of the current year when Salt and Pepper each contributed $10,000 cash and together began to operate a business as equal partners. Both work full-time in the partnership. The partnership borrowed $40,000 on a nonrecourse basis during the year. There are no guarantees or loss limitation agreements. Operations in the year resulted in a $5,000 ordinary loss, $2,000 tax-exempt income, and an $800 charitable contribution. What is Salt's basis at the end of the current year?

+3
Answers (1)
  1. 29 August, 02:23
    0
    Salt's basis = - $3900 from a 50% sharing basis

    Explanation:

    profit sharing ratio as per contributions is 50%:50%

    ordinary loss - $5000

    tax exempt income - $2000

    Charitable contribution - $800

    Taxable loss = $7800

    profit (loss) share

    Salt = - 3900

    Pepper = -3900
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The Salt and Pepper Partnership was formed in January of the current year when Salt and Pepper each contributed $10,000 cash and together ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers