You made a partner in your accounting firm, Smart & Smarter, LLP. You made your initial capital contribution of $250,000 on January 1, Year A, and in exchange received a .4% equity interest in the partnership. Here are some additional facts.

• Smart & Smarter’s Year A Form 1065 reported an ordinary business income of $160,096,336. Smart & Smarter distributed an aggregate total of $142,834,019 cash to its partners during the year.
• Smart & Smarter’s Year B Form 1065 reported an ordinary business income of $180,440,025. Smart & Smarter distributed an aggregate total of $165,316,650 cash to its partners during the year
• Oops! Smart & Smarter’s Year C Form 1065 reported a net operating loss of $22,090,046. Nevertheless, Smart & Smarter distributed an aggregate total of $126,960,260 cash to its partners during the year.
• For none of those three years, A through C did Smart & Smarter’s Form 1065 report any other category of income/expense or gain/loss. All allocations and distributions from Smart & Smarter to its partners during or for those three years were pro-rata.

What is your adjusted basis in your partnership interest at January 1, Year D?

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