Doug Purchases a 20% Interest in the Quix Partnership for $10,000

question 16

Essay

Doug purchases a 20% interest in the Quix Partnership for $10,000 on January 1, 2019, and begins to materially participate in the partnership's business. The Quix Partnership uses the calendar year as its tax year. At the time of the purchase, the Quix Partnership has $4,000 in liabilities, and Doug's share is 20%. What is Doug's basis in his partnership interest on January 1, 2010?

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Definitions:

Guaraní

A group of culturally and linguistically related indigenous peoples in South America, primarily found in Paraguay and parts of the surrounding countries.

Bilingual

Able to speak two languages; in Canadian history, the official recognition of English and French as equal official languages.

Paraguay

A landlocked country in South America, bordered by Argentina, Brazil, and Bolivia, known for its rich history, culture, and diverse ecosystems.

Expansionist Stage

A phase in the development of a country or empire during which it seeks to increase its size and influence by acquiring new territories.