Roger Is a 30% Partner in the ROC Partnership

question 137

Multiple Choice

Roger is a 30% partner in the ROC Partnership.At the beginning of the tax year,Roger's basis in the partnership interest was $60,000,including his share of partnership liabilities.During the current year,ROC reported net ordinary income of $40,000.In addition,ROC distributed $5,000 to each of the partners ($15,000 total) .At the end of the year,Roger's share of partnership liabilities increased by $20,000.Roger's basis in the partnership interest at the end of the year is:

• A)$60,000.
• B)$75,000.
• C)$87,000.
• D)$120,000.
• E)None of the above.

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Definitions:

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Operating Agreement

A document that outlines the governance and business operations of an LLC, agreed upon by its members.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership with the limited liability protections of a corporation.

Managing Business

The process of organizing, planning, leading, and controlling the operations of a business to achieve its objectives.