Dan Purchases a 25% Interest in the Haymarket Partnership for $20,000

question 104

Essay

Dan purchases a 25% interest in the Haymarket Partnership for $20,000 on January 1,2010,and begins to materially participate in the partnership's business.The Haymarket Partnership uses the calendar year as its tax year.At the time of the purchase,the Haymarket Partnership has $2,000 in liabilities,and Dan's share is 25%.During the year,the Haymarket Partnership incurs $100,000 in losses and its liabilities increase by $4000.What is Dan's basis in his partnership interest on December 31,2010?

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Definitions:

Management Functions

The main tasks of managers, usually categorized into planning, organizing, leading, and controlling to achieve organizational goals.

Enthusiasm

A sense of lively enthusiasm for a specific subject or activity, accompanied by a keen desire to participate in it.

Resources Together

The act of pooling various types of resources such as financial, human, and material to achieve a common goal or project.

Impoverished Management

A management style associated with low concern for both people and production in Blake and Mouton's Managerial Grid.