1-

Jim's basis in his partnership is $200,000. His share of the current year partnership income is $60,000. The partnership paid him a $75,000 distribution in the current year. What is his new basis in the partnership at the end of the year and what is his taxable income from the partnership?

a.$185,000; $135,000

b.$260,000; $60,000

c.$200,000; $75,000

d.$185,000; $60,000

e.$140,000; $60,000

2-

An equal partnership is formed by Rita and Gerry. Rita contributes cash of $10,000 and a building with a fair market value of $150,000, adjusted basis of $55,000, and subject to a liability of $60,000. Gerry contributes cash of $100,000. What amount of gain must Rita recognize as a result of this transaction?

a.$5,000

b.$0

c.$95,000

d.$35,000

e.None of these choices are correct.

3-

Calculator

The partnership of Truman and Hanover realized the following items of income during the year ended December 31, 2016:

Net income from operations	$65,000
Dividends from domestic corporations	4,000
Interest on corporate bonds	3,000
Net long-term capital gains	5,000
Net short-term capital gains	1,000

Both the partners are on a calendar year basis. What is the total income which should be reported as ordinary income from business activities of the partnership for 2016?

a.$71,000

b.$65,000

c.$0

d.$69,000

e.None of these choices are correct.