Joey and Bob Each Have a 50% Interest in a Partnership.Both

question 29

Multiple Choice

Joey and Bob each have a 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 2018.Joey's adjusted basis in his partnership interest on January 1,2018,was $5,000.In 2019,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 2018 and 2019 individual income tax returns?

• A) \[\begin{array} { | l | l |}
• \hline 2018 & 2019 \\
• \hline ( \$ 5,000 ) & \$ 4,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l |}
• \hline 2018 & 2019 \\
• \hline ( \$ 5,000 ) & \$ 5,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l |}
• \hline 2018 & 2019 \\
• \hline ( \$ 6,000 ) & \$ 4,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l |}
• \hline 2018 & 2019 \\
• \hline ( \$ 6,000 ) & \$ 5,000 \\
• \hline
• \end{array}\]

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Definitions:

Conception

The process of fertilization where a sperm cell unites with an egg cell, resulting in the beginning of a pregnancy.

Birthweight

The weight of a baby immediately after birth, considered an important indicator of neonatal and infant health.

Extremely Low

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Birthweight

The weight of a newborn measured shortly after birth, an important indicator of the baby's health and development.