**Please see screenshots below. I need help solving part e**

The KL Partnership is owned equally by Kayla and Lisa. At the beginning of the year, Kayla's tax basis in her KL interest is $20,000 and Lisa's tax basis is $16,000. Partnership debt did not change from the beginning to the end of the tax year. KL reported the following income and expenses for the current tax year. Assume total assets are $680,400.

Sales revenue $150,000

Cost of sales 80,000

Distribution to Lisa 15,000

Depreciation expense 20,000

Utilities 14,000

Rent expense 18,000

Long-term capital gain 6,000

Payment to Mercy Hospital for Kayla's medical expenses 12,000

\begin{tabular}{l|l|l|l|l} Form 1065 \\ Department of the \\ Treasury Internal \\ Revenue Service \end{tabular} I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year J Check if Schedules C and M3 are attached Caution: Include only trade or business income and expenses on lines la through 22 below. See the instructions for more information. Sign |Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and Here to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than partner or limited liability company member) is based on all information of which preparer has any knowledge. May the IRS discuss this return with the preparer shown below? See instructions, Yes No Signature of partner or limited liability company member Date For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11390Z Form 1065(2019) c. What information will be shown on Kayla's and Lisa's Schedules K-1, Part III? Kayla's and Lisa's Schedules K-1 will each show a \$ share of partnership income (line 1), and a; share of the partnership's long-term capital gain (line 9a), and 5 of income from self-employment (line 14a), Kayla's K- 1 will show a distribution and Lisa's K-1 will show a $ distribution (both on line 19). What items will Kayla and Lisa report on their Federal income tax returns? Kayla and Lisa will each report $ on their Schedule E and $ on Schedule D. Feectbsck T Check My Work Partially correct d. What is each partner's basis in her partnership interest at the end of the tax year? Kayla's basis: : Lisa's basis: \$ Consider the results if the partnership's revenues were $100,000 instead of $150,000. If required, use the minus sign to indicate an ordinary business loss. If an answer is zero, enter " 0 ". e. Consider the results if the partnership's revenues were $100,000 instead of $150,000. How much is the partnership's ordinary business income (loss) on page 1? $ What amount is shown on lines 1,9 and 20 on Schedule K? Line 1: Line 9a: $x Line 19a: $ Use the ordering rules of Exhibit 21.2 (and the loss limitation rules), and calculate Kayla's basis in her partnership interest at the end of the year. Basis before loss allocation: $ Ordinary loss allowed under 704(d): \$ Ending basis in interest: $ Based on this calculation, what does Kayla report on her tax return? She reports a of $ and of 5 Use the ordering rules of Exhibit 21.2 (and the loss limitation rules), and calculate Lisa 's basis in her partnership interest at the end of the year. Basis before loss allocation: $ Ordinary loss allowed under 704(d): \$ Ending basis in interesti $ Based on this calculation, what does Lisa report on her tax return? She reports a of $ and of 5 Feestack T Check My Work The measurement and reporting of partnership income require a two-step approach. Certain items must be netted at the partnership level, and other items must be segregated and reported separately on the partnership return and each partner's Schedule K-1. \begin{tabular}{l|l|l|l|l} Form 1065 \\ Department of the \\ Treasury Internal \\ Revenue Service \end{tabular} I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year J Check if Schedules C and M3 are attached Caution: Include only trade or business income and expenses on lines la through 22 below. See the instructions for more information. Sign |Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and Here to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than partner or limited liability company member) is based on all information of which preparer has any knowledge. May the IRS discuss this return with the preparer shown below? See instructions, Yes No Signature of partner or limited liability company member Date For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11390Z Form 1065(2019) c. What information will be shown on Kayla's and Lisa's Schedules K-1, Part III? Kayla's and Lisa's Schedules K-1 will each show a \$ share of partnership income (line 1), and a; share of the partnership's long-term capital gain (line 9a), and 5 of income from self-employment (line 14a), Kayla's K- 1 will show a distribution and Lisa's K-1 will show a $ distribution (both on line 19). What items will Kayla and Lisa report on their Federal income tax returns? Kayla and Lisa will each report $ on their Schedule E and $ on Schedule D. Feectbsck T Check My Work Partially correct d. What is each partner's basis in her partnership interest at the end of the tax year? Kayla's basis: : Lisa's basis: \$ Consider the results if the partnership's revenues were $100,000 instead of $150,000. If required, use the minus sign to indicate an ordinary business loss. If an answer is zero, enter " 0 ". e. Consider the results if the partnership's revenues were $100,000 instead of $150,000. How much is the partnership's ordinary business income (loss) on page 1? $ What amount is shown on lines 1,9 and 20 on Schedule K? Line 1: Line 9a: $x Line 19a: $ Use the ordering rules of Exhibit 21.2 (and the loss limitation rules), and calculate Kayla's basis in her partnership interest at the end of the year. Basis before loss allocation: $ Ordinary loss allowed under 704(d): \$ Ending basis in interest: $ Based on this calculation, what does Kayla report on her tax return? She reports a of $ and of 5 Use the ordering rules of Exhibit 21.2 (and the loss limitation rules), and calculate Lisa 's basis in her partnership interest at the end of the year. Basis before loss allocation: $ Ordinary loss allowed under 704(d): \$ Ending basis in interesti $ Based on this calculation, what does Lisa report on her tax return? She reports a of $ and of 5 Feestack T Check My Work The measurement and reporting of partnership income require a two-step approach. Certain items must be netted at the partnership level, and other items must be segregated and reported separately on the partnership return and each partner's Schedule K-1