Question
Ryan and Mary are individual partnerships in Blue Inc Partnership and share equally in its profits and losses. Ryan had a basis of $5,000 in
Ryan and Mary are individual partnerships in Blue Inc Partnership and share equally in its profits and losses. Ryan had a basis of $5,000 in the partnership, before considering the $14,000 ordinary loss reported by Blue Inc Partnership for 20X5. In 20X6, the partnership reports a $6,000 ordinary gain on Form 1065. What net income or loss should Ryan report on his 20X6 personal return? Assume that there are no other transaction that affect his basis in the partnership for 20X5 and 20X6.
a. $0
b. $2,000 loss
c. $1,000 income
d. $2,000 income
e. $3,000 income
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