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Garlic, an individual, is a limited partner in Onion Partnership. This year, Garlic's share of partnership ordinary income is $20,000, and she received a cash
Garlic, an individual, is a limited partner in Onion Partnership. This year, Garlic's share of partnership ordinary income is $20,000, and she received a cash distribution of $30,000. Garlic's tax basis in her partnership interest at the beginning of the year was $50,000. Her marginal tax rate is 22 percent. Garlic qualifies for the QBI deduction, without regard to any limitations on this QBI deduction. Required: a. Calculate the tax cost of Garlic's partnership earnings this year. b. Compute Garlic's after-tax cash flow from her partnership activity this year. b. Compute Garlic's after-tax cash flow from her partnership activity this year. c. Compute Garlic's tax basis in her partnership interest at the ending of the year. Assume no change in her share of partnership liabilities during the year
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