Locke Is a 50% Partner in the LS Partnership

question 40

Essay

Locke is a 50% partner in the LS Partnership. Locke has a basis in his partnership interest of $84,000 at the end of the current year, prior to any distribution. On December 31, Locke receives an operating distribution of $30,000 cash. LS has no debt or hot assets. What is the amount and character of Locke's recognized gain or loss? What is Locke's ending basis in his partnership interest?

---

Definitions:

Insects

A class of arthropods characterized by a three-part body, including a head, thorax, and abdomen, three pairs of jointed legs, compound eyes, and one pair of antennae.

Species

Group of similarly constructed organisms capable of interbreeding and producing fertile offspring; organisms that share a common gene pool; the taxon at the lowest level of classification.

Individuals

Refers to distinct beings, often used in the context of discussing singular human beings.

Arachnid

Group of arthropods that includes spiders and scorpions.