Roger is a 30% partner in the Roc Partnership. At the beginning of the tax year, Roger's basis in the partnership interest was $60,000, including his share of partnership liabilities. During the current year, Roc reported an ordinary income of $40,000. In addition, Roc distributed $5,000 to each of the partners ($15,000 total). At the end of the year, Roger's share of partnership liabilities increased by $20,000. Roger's basis in the partnership interest at the end of the year is: a. $60,000 b. $75,000 c. $87,000 d. $120,000 e. none of the above

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.