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Problem: Module 7 Textbook Problem 3 Learning Objectives: 7-5 Differentiate between a distributive share...

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Problem: Module 7 Textbook Problem 3 Learning Objectives: 7-5 Differentiate between a distributive share of partnership income and cash flow 7.6 Adjust the tax basis in a partnership interest Garlic, an individual, is a limited partner in Onion Partnership. This year, Garlic's share of partnership ordinary income is $20,000, and she received a cash distribution of $30,000. Garlic's tax basis in her partnership interest at the beginning of the year was $50,000. Her marginal tax rate is 22 percent. Garlic qualifies for the QBI deduction, without regard to any limitations on this OBI deduction Required: a. Calculate the tax cost of Garlic's partnership earnings this year. Tax cost b. Compute Garlic's after-tax cash flow from her partnership activity this year, After-tax cash flow c. Compute Garlic's tax basis in her partnership interest at the ending of the year. Assume no change in her share of partnership liabilities during the year. Tax basis at the end of the year

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