ANSWER THE QUESTION ACCURATE SHOW YOUR CALCULATION.

ohn Jonathan and Tom Thompson decide to form a partnership called Custom Bikes on January $1,2022.$ John contributes cash for a $40\%$ interest in capital and profits. Tom contributes equipment with a basis of $$10,000$ and an FMV of $$30,000$ for the other $60\%$ interest in capital and profits.

On January $1,2022,$ the partnership bought machinery for use in its business by spending $$20,000$ cash and incurring a non$-$recourse liability of $$40,000.$ The loan agreement stipulates that no payments need to be made until the seventh year. In addition, the machinery will be depreciated over five years $($using straight$-$line depreciation and beginning with a full year of depreciation in $2022).$ Since the cash that John contributed is being used to purchase this property, the partners have agreed to split the depreciation equally $(50\%$ to each partner$).$

Based on this information, prepare the tax workpapers using an Excel document, in which you determine and report each partner$$s basis at the end of Year $1(2022).$ Be sure to indicate the adjustments that would be made to each partner$$s basis at the end of Year $4(2025).$

PLEASE NOTE THAT IF YOU CANT ANSWER THIS CORRECTLY DONT TAKE IT AND WASTE MY MONEY