Jerry, a Partner with 30 Percent Capital and Profits Interest

question 76

Multiple Choice

Jerry, a partner with 30 percent capital and profits interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry's tax basis in his partnership interest was $49,000. His current-year Schedule K-1 reported an ordinary loss of $14,000, long-term capital gain of $4,100, qualified dividends of $3,100, $1,600 of non-deductible expenses, a $21,000 cash contribution, and a reduction of $5,100 in his share of partnership debt. What is Jerry's adjusted basis in his partnership interest at the end of the year?

• A) $35,000
• B) $42,200
• C) $56,500
• D) $61,600

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Definitions:

Gate Control Theory

A theory in neuroscience proposing that pain signals passing through the spinal cord can be modulated by a "gate" that either blocks or allows them to proceed to the brain, significantly affecting pain perception.

Specificity Theory

A theory suggesting that specific receptors in the body are responsible for specific sensations, such as pain.

Tissue Damage

The physical destruction or deterioration of tissue in the body, often resulting from injury, disease, or exposure to harmful substances.

Acute Pains

Short-term, intense pain that typically signals harm or potential damage to the body and subsides with healing.