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Wayne has a beginning basis in a partnership of $46,000. His share of income and expense...

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Accounting

Wayne has a beginning basis in a partnership of $46,000. Hisshare of income and expense from the partnership consists of thefollowing amounts: Ordinary income $86,000, Guaranteed payment24,000, Long-term capital gain 31,000, §1231 gain 8,600, Charitablecontributions 4,000, §179 expense 36,000, Cash distribution12,000.

Beginning basis = $46,000

Guaranteedpayment                              = $24,000

Long-term Capitalgain                          = $31,000

1231gain                                               = $8,600

                                                                  $109,600

Charitablecontributions                        = ($4,000)

179Expense                                           = ($36,000)

Cashdistribution                                    = ($12,000)

End of yearbasis                                  = $57,600

I was told my answer of $57,600 was incorrect, anyadvice?

Answer & Explanation Solved by verified expert
4.4 Ratings (700 Votes)

Answer) Ending Basis is determined as below:

Beginning Basis

         46,000

Income

         24,000

LTCG

         31,000

1231 Gain

           8,600

Charitable Contribution

          -4,000

Section 179

       -36,000

Cash Distribution

       -12,000

Ending Basis

$57,600

$57,600 is the correct answer.

If you need self employment income, that is determined below:

Ordinary Income        86,000
Guaranteed Payment        24,000
Section 179       -36,000
Self-employment Income $74,000

Thanks
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