Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:

Sales revenue	$	470,000
Cost of goods sold	$	410,000
Operating expenses	$	70,000
Long-term capital gains	$	2,400
1231 gains	$	900
Charitable contributions	$	300
Municipal bond interest	$	300
Salary paid as a guaranteed payment to Deanne (not included in expenses)	$	3,000

List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnerships first year of operations.(Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Losses and deductions should be entered with a negative sign.) (Leave no answer blank. Enter zero if applicable.)

	Total	Keon	Aaron	Deanne
Ordinary Business Income
Separately stated items on schedule K-1
Long Term Capital Gains
Section 1231 Gains
Municipal Bond Interest
Charitable contributions
Mortgage Reduction (deemed cash contribution)	(7,000)	(2,333)	(2,333)	(2,333)
Self-Employment Income (Loss)
Guartenteed Payment (Enter as positive amount)

d.

What are the partners adjusted bases in their partnership interests at the end of the first year of operations?

	Keon	Aaron	Deanne
Adjusted Basis

a. The initial adjusted basis for Keon is $ 23,333, for Aaron $133,333 and for is 133,333 as shown in below calculation Keon Aaron Deanne Explanation 1 Basis in contributed land ARKK) Cash Contributed Debt collected to partners 110000 110000 23333 23333 23333 70000 4Relif from noncourse mortgage 5 Gain recognized 23)if positive otherwise o 0 0 6 Partners initial Tax Basis | 23333| 133333| 133333|(1)+(2)+(3)+(4)