Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included in that amount is a $15,000 share of partnership liabilities. His capital account is $70,000 on January 1st of 2021. During the year, Jack is allocated the following amounts: Long-term capital gain: $2,000 Ordinary income of the partnership: $10,000 A guaranteed payment: $60,000 All of the above income and deduction items are the same amount for both book accounting income and taxable income. At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cash distribution of $40,000. These payments are intended as a partial liquidation of his partnership interest. What is the amount of Jack's capital account after all of these events? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!

Jack is a 20% partner in a service partnership. His outside basis is $80,000 on January 1st of 2021. Included in that amount is a $15,000 share of partnership liabilities. His capital account is $70,000 on January 1st of 2021. During the year, Jack is allocated the following amounts: Long-term capital gain: $2,000 Ordinary income of the partnership: $10,000 A guaranteed payment: $60,000 All of the above income and deduction items are the same amount for both book accounting income and taxable income. At the end of the year, the partnership relieves him of $5,000 of partnership liabilities and gives him a cash distribution of $40,000. These payments are intended as a partial liquidation of his partnership interest. What is the amount of Jack's capital account after all of these events? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!!

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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