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  3. - 7.6 adjust the tax basis in a partnership intere

- 7.6 Adjust the tax basis in a partnership interest -7.7 Apply the basis limitation...

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Accounting

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- 7.6 Adjust the tax basis in a partnership interest -7.7 Apply the basis limitation on the deduction of partnership losses. On January 1, Year 1, Ginger, an individual, paid $16,000 for 5 percent of the stock in Root Corp, an $ corporation, In November Year 1, he loaned $9,000 to Root Corp. in return for a promissory note. Root Corp. generated a $610,000 operating loss in Year 1. Root Corp: generated $409,000 ordinary business income in Year 2. Required: a. How much of Ginger's share of this income is included in his Year 2 taxable income? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the end of Year 2. c. How would your answers to parts a and b change if Root Corp's ordinary business income was only $221,000 ? Complete this question by entering your answers in the tabs below. a. How much of Ginger's share of this income is included in his Year 2 taxable income? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the end of Year 2

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