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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...

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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 This year, individual Kale and individual Spinach formed Leafy Green Partnership. Kale contributed $71,750 cash, and Spinach contributed business assets with a $71,750 FMV. Spinach's adjusted basis in these assets was only $14,350. The partnership agreement provides that income and loss will be divided equally between the two partners. Partnership operations for the year generated a $59,200 loss. Required: How much loss may each partner deduct currently, and what basis will each partner have in her interest at the beginning of next year? Determine the loss each partner can deduct currently considering the basis loss limitation, but no other loss limitations. (Losses and deductions should be entered as negative numbers.)

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