Sandy and Larry Each Have a 50% Interest in SL $$\begin{array} { | l | l | } \hline 2018 & 2019 \\\hline ( \$ 12,000 ) & \$ 7,000 \\\hline\end{array}$$

question 21

Multiple Choice

Sandy and Larry each have a 50% interest in SL Partnership.The partnership and the individuals file on a calendar-year basis.In 2018,SL Partnership had a $30,000 ordinary loss.Sandy's adjusted basis in her partnership interest on January 1,2018,was $12,000.In 2019,SL Partnership had ordinary income of $20,000.Assuming there were no other adjustments to Sandy's basis in the partnership,what amount of partnership income (loss) would Sandy show on her 2018 and 2019 individual income tax returns?

• A) \[\begin{array} { | l | l | }
• \hline 2018 & 2019 \\
• \hline ( \$ 12,000 ) & \$ 7,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline 2018 & 2019 \\
• \hline ( \$ 12,000 ) & \$ 10,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline 2018 & 2019 \\
• \hline ( \$ 15,000 ) & \$ 7,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline 2018 & 2019 \\
• \hline ( \$ 15,000 ) & \$ 10,000 \\
• \hline
• \end{array}\]

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Definitions:

Upper Control Limit

The highest value on a control chart that represents the boundary of acceptable variation for a process or quality measurement.

Center Line

In quality control charts, this line represents the average or mean value around which data points are expected to fluctuate.

Lower Control Limit

A statistical boundary in quality control processes, below which a process variation is considered non-random and indicative of a systemic issue needing correction.