1. This year, Darrel's distributive share from Alcove Partnership includes $7,000 of interest income, $2,100 of dividend income, and $68,000 ordinary business income.

a. Assume that Darrel materially participates in the partnership. How much of his distributive share from Alcove Partnership is potentially subject to the net investment income tax?

2. Mustafa's tax basis in his partnership interest at the beginning of the year was $16,000. If his share of the partnership liabilities increased by $10,500 during the year and his share of partnership income for the year is $3,800, what is his tax basis in his partnership interest at the end of the year?