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Comprehensive Problem 20-80 (LO 20-1, LO 20-2, LO 20-3, LO 20-4, LO 20-5, LO 20-6) (Algo)

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[The following information applies to the questions displayed below.] Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $102,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $78,000 and was appraised at $180,000. The land was also encumbered with a $78,000 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 $6,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:

Sales revenue	$ 490,000
Cost of goods sold	410,000
Operating expenses	80,000
Long-term capital gains	2,100
1231 gains	900
Charitable contributions	300
Municipal bond interest	300
Salary paid as a guaranteed payment to Deanne (not included in expenses)	3,000

Comprehensive Problem 20-80 Part 1 (Algo)

1. a. Compute the adjusted basis of each partners interest in the partnership immediately after the formation of the partnership.

2. b. 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.

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

A. Compute the adjusted basis of each partners interest in the partnership immediately after the formation of the partnership. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

	Keon	Aaron	Deanne
Adjusted basis	$0	$0	$0

B. 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. Negative amounts should be entered with a minus sign. Leave no answer blank. Enter zero if applicable.)

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Description	Total	Keon	Aaron	Deanne
Ordinary business income (loss)
Separately stated items on Schedule K-1:

D. What are the partners adjusted bases in their partnership interests at the end of the first year of operations? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

	Keon	Aaron	Deanne
Adjusted basis