Peter, Matt, Priscilla, and Mary Began the Year in the PMPM

question 34

Essay

Peter, Matt, Priscilla, and Mary began the year in the PMPM General Partnership sharing profits, losses, and capital equally. They each had a tax basis at the beginning of the year of $3,000, $10,000, $8,000, and $11,000 respectively. Early in the year, Mary provided general consulting services to the partnership and received an additional 15 percent profits, losses, and capital interest in the partnership. The liquidation value of her additional interest was $45,000. Later the same year, the partnership received cash contributions of $25,000 from Peter and Matt that it used to repay the partnership's $35,000 recourse debt. According to state law, the partners shared responsibility for this debt in accordance with their loss sharing ratios. What is each partner's tax basis after adjustment for these transactions?

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Definitions:

Sexual Abuse

Non-consensual activities or actions of a sexual nature that harm or exploit one or more individuals.

Incest

Sexual relations between family members or close relatives that are considered taboo by societal norms.

Extrafamilial

Occurring or existing outside the family unit; involving persons who are not members of one's family.

Verbal Cues

Elements of communication expressed through spoken words that convey messages or suggestions, often used to signal or emphasize ideas.