Loan From Diane Dunn to Preston Partners

EXHIBITS

Ordinary Business Income From Operati.

Guaranteed Payments to Partners

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exhibits

Loan From Diane Dunn to Preston Partn.

Preston Partners, a calendar$-$year partnership, has two unrelated general partners, Jack Preston and Diane Dunn. Jack has a $75$

percent ownership interest in the partnership and Diane has a $25$ percent ownership interest. Both partners are actively involved in

the operations of the partnership and have substantial tax basis in their partnership interests. In the current year, Year $1,$ there were

several transactions between the partners and the partnership including loans, sales of property, and payments to partners for

services performed for the partnership.

Using the information provided in the exhibits, enter the amount of the increase or decrease in each partner's basis in his or her

partnership interest for each Year $1$ partnership item listed in the table below. Enter increases as positive whole numbers and

decreases as negative whole numbers. If the amount is zero, enter a zero $(0)$

This loan agreement dated November $30,$ Year $1,$ is between Dlane Dunn $($the "Lender"$)$ and

Preston Partners Partnership $($the "Borrower"$).$

The Lender promlses to loan $$12,000$ USD to the Borrower and the Borrower promises to repay

this princlpal amount to the Lender by January $31,$ Year $2,$ along with interest on the principal

amount of $1$ percent. The Interest rate is at or above the current short$-$term applicable federal

rate $($AFR$).$

This loan is recourse debt that is not secured by any partnership property.

This agreement constitutes the entire agreement between the parties and there are no further

Items or provislons, elther oral or otherwlse.

In withess whereof, the partles have duly affixed thelr signatures on thls $30$th day of November,

Year $1.$