Jayanthi and Krish each own a 50 percent general partner interest in the JK Partnership. The following information is available regarding the partnership’s 2014 activities:
Sales revenue …………………………$500,000
Selling expenses ………………………… 200,000
Depreciation expense …………………… 30,000
Long-term capital gain ………………… 9,000
Nondeductible expenses ………………… 2,000
Partnership debts, beginning of the year…. 100,000
Partnership debts, end of the year ……… 120,000
Partnership distributions
Jayanthi ………………………………… 50,000
Krish ………………………………… 50,000
a. Calculate the partnership’s ordinary (non-separately stated) income and indicate which items must be separately stated.
b. Calculate Jayanthi’s allocable share of partnership items.
c. If Jayanthi has no other sources of taxable income, what is her total gross income for 2014?
d. At the beginning of the year, Jayanthi’s adjusted tax basis in her partnership interest was $25,000. Calculate her ending adjusted tax basis in her partnership interest.