Allison Is a 40% Partner in the BAM Partnership

question 23

Multiple Choice

Allison is a 40% partner in the BAM Partnership.At the beginning of the tax year,Allison's basis in the partnership interest was $100,000,including her share of partnership liabilities.During the current year,BAM reported an ordinary loss of $60,000 (before the following payments to the partners) .In addition,BAM made an ordinary distribution of $8,000 to Allison and paid partner Brian a $20,000 consulting fee.At the end of the year,Allison's share of partnership liabilities decreased by $10,000.Assuming loss limitation rules do not apply,Allison's basis in the partnership interest at the end of the year is:

• A)$2,000.
• B)$50,000.
• C)$58,000.
• D)$70,000.

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Definitions:

Anal

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