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Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2020, the adjusted basis in her YZ interest was $95,000. For

Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2020, the adjusted basis in her YZ interest was $95,000. For 2020, YZ generated a $210,000 business loss, earned $14,600 dividend and interest income on its investments, and recognized a $6,200 capital gain. YZ made no distributions to its partners and had no debt. In 2021, YZ generated $7,000 ordinary business income and $18,000 dividend and interest income. The partnership made no distributions. At the end of the year, YZ had $21,000 debt.

Required:

  1. How much partnership income will Zelda report on her 2021 return? Assume the excess business loss limitation does not apply.
  2. Compute Zeldas adjusted basis in her YZ interest at the end of 2021.

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