At the Beginning of the Year, Heather's Tax Basis Capital

question 119

Multiple Choice

At the beginning of the year, Heather's tax basis capital account balance in the HEP Partnership was $85,000. During the tax year, Heather contributed property with a basis of $6,000 and a fair market value of $10,000. Her share of the partnership's ordinary income and separately stated income and deduction items was $40,000. At the end of the year, the partnership distributed $15,000 of cash to Heather. In addition, the partnership allocated $12,000 of recourse debt and $10,000 of nonrecourse debt to Heather. What is Heather's ending capital account balance determined using the tax basis method?

• A) $116,000
• B) $120,000
• C) $126,000
• D) $128,000
• E) $138,000

---

Definitions:

Knowledge Dissemination

The process of spreading information and insights across different stakeholders, including individuals, organizations, and communities, to enhance understanding and application.

Geo-political Standing

The position or status of a country or region in relation to its political and geographical characteristics, influencing its relations with others.

Information/Communications Technology

A broad term for technology used in capturing, processing, storing, and exchanging data and information, including computers, internet, and telecommunications.