Alfred, a One-Third Profits and Capital Partner in Pizzeria Partnership

question 34

Essay

Alfred, a one-third profits and capital partner in Pizzeria Partnership needs help in adjusting his tax basis to reflect the information contained in his most recent Schedule K-1 from the partnership. Unfortunately, the Schedule K-1 he recently received was for year 3 of the partnership, but Alfred only knows that his tax basis at the beginning of year 2 of the partnership was $23,000. Thankfully, Alfred still has his Schedule K-1 from the partnership for years 1 and 2.
Using the following information from Alfred's year 1, year 2, and year 3 Schedule K-1, calculate his tax basis the end of year 2 and year 3. LEAST AGGREGATE DEFERRAL TEST
$\begin{array}{|l|r|r|r|r|r|r|r|r|r|rr|r|}\hline &31-Jan&&&31-may&&&31-Jul&&&31-Oct\\\hline &\text { Profits }&\text {Deferral }&&\text {Profits }&\text {Deferral }&&\text { Profits }&\text {Deferral }&&\text { Profits }&\text {Deferral }\\&\text {Interest }&\text {Months }&\text { Total}&\text {Interest }&\text {Months }&\text { Total}&\text {Interest }&\text {Months }&\text { Total}&\text {Interest }&\text {Months }&\text { Total}\\\hline \text { Inc. } & 30 \% & 0 & 0 & 30 \% & 8 & 2.4 & 30 \% & 6 & 1.8 & 30 \% & 3 & 0.9 \\\hline \text { P } & 30 \% & 4 & 1.2 & 30 \% & 0 & 0 & 30 \% & 10 & 3 & 30 \% & 7 & 2.1 \\\text { Inc. }\\\hline \text L &30\%&6&1.8&30\%&2&0.6&30\%&0&0&30\%&9&2.7 \\\text { Inc. } \\\hline \text C&10\%&9&0.9&10\%&5&0.5&10\%&3&0.3&10\%&0&0 \\\text { Inc. }\\\hline \text {Total}&100\%&&3.9&100\%&&3.5&100\%&&5.1&100\%&&5.7\\\hline\end{array}$

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Definitions:

Retail Transactions

Business operations involving the sale of goods or services directly to consumers for personal use.

Trademarks

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Advertising Slogans

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Registered Phrases

Registered Phrases are phrases that have been legally registered for protection, often in the context of trademarks to identify the services or goods of a particular source.