Bev and Cabel Each Have 50% Ownership in Finch Partnership

question 22

Multiple Choice

Bev and Cabel each have 50% ownership in Finch Partnership. Bev's partnership interest has a basis of $225,000. Finch's taxable income for the current year is $100,000, and it distributes $180,000 to each partner. Bev's partnership interest basis at the end of the year is:

• A)$0.
• B)$45,000.
• C)$95,000.
• D)$100,000.
• E)None of the above.

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Definitions:

Down Payment

An initial upfront portion of the total amount due, typically associated with the purchase of expensive items like a home or car, which reduces the amount needed to be borrowed.

Lump Sum

A large single payment of money instead of a series of smaller payments or installments.

Annual Payments

Regular payments made once a year, often associated with loans, annuities, or other financial agreements.

Interest Rate

It's the rate, in the form of a percentage of the principal, charged by lenders to borrowers for asset usage.