William and Joan form a partnership with William having a 30 percent interest and Joan the remaining 70 percent. Joan contributed $80,000 cash and services valued at $4,000.William contributed $6,000 cash and property valued at

$30,000 that has a basis of $20,000. At the end of the year, the partnership reports the following:

Ordinary income (excluding guaranteed payments) $90,000 Tax-exempt bond interest 2,000 Capital loss 4,000 Guaranteed payment to Joan 30,000 Cash distribution to Joan 25,000 3-year note on land 15,000 What is William’s basis in his partnership interest at year-end?

a. $43,400

b. $45,800

c. $47,900

d. $45,900 AppendixLO1