You invest $300,000 and become a 25% partner in Smart & Smarter, CPAs, on January 2, Year 1.

During Year 1 you (and each of the other partners) receive cash distributions from the partnership of $200,000. Later, your Year 1 Schedule K-1 shows $650,000 in Box 1.

In Year 2 you (and each other partner) receive cash distributions from the part-nership of $400,000. Later, your Year 2 Schedule K-1 shows $450,000 in Box 1.

In Year 3 you (and each other partner) receive cash distributions of $200,000. But it wasn’t a great year for the partnership, so your Year 3 Schedule K-1 shows ($250,000) in Box 1.

On your answer sheet, state the amount of your adjusted basis in your partner-ship interest in Smart & Smarter as of January 1, Year 4.