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C:9-32 Partnership Income and Basis Adjustments. Mark and Pamela are equal partners in MP Partnership....

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C:9-32 Partnership Income and Basis Adjustments. Mark and Pamela are equal partners in MP Partnership. The partnership, Mark, and Pamela are calendar year taxpayers. The partner- ship incurred the following items in the current year: Sales Cost of goods sold Dividends on corporate investments lax-exempt interest income Sec. 1245 gain (recapture) on equipment sale Sec. 1231 gain on equipment sale Long-term capital gain on stock sale Long-term capital loss on stock sale Short-term capital loss on stock sale Depreciation (no Sec. 179 or bonus depreciation components) Guaranteed payment to Pamela Meals and entertainment expenses Interest expense on loans allocable to: $450,000 210,000 15,000 4,000 33,000 18,000 12,000 10,000 9,000 27,000 30,000 11,600 Business debt Stock investments Tax-exempt bonds 42,000 9,200 2,800 14,000 5,000 80,000 Principal payment on business loan Charitable contributions Distributions to partners ($40,000 each) a. Compute the partnership's ordinary income and separately stated items. b. Show Mark's and Pamela's shares of the items in Part a, c. Compute Mark's and Pamela's ending basis in their partnership interests assuming their beginning balances are $150,000 each

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