Joey and Bob Each Have 50% Interest in a Partnership

question 30

Multiple Choice

Joey and Bob each have 50% interest in a Partnership. Both Joey and the partnership file returns on a calendar year basis. Partnership Q had a $12,000 loss in 2014. Joey's adjusted basis in his partnership interest on January 1, 2014 was $5,000. In 2015, the partnership had a profit of $10,000. Assuming there were no other adjustments to Joey's basis in the partnership, what amount of partnership income (loss) should Joey show on his 2014 and 2015 individual income tax returns?

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Definitions:

IRS Form

A document that is used for reporting and filing information with the Internal Revenue Service (IRS) in the United States.

Sole Proprietorships

A business structure where the business is owned and run by one individual, with no distinction between the business and the owner.

Partnerships

A business organization where two or more individuals manage and operate the business in accordance with terms set out in a partnership agreement.

Bill Form

A document template used for outlining the details of a billing transaction, including the amount due, services or products provided, and payment terms.