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Anonymous
timer Asked: Oct 30th, 2014
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47. The KL Partnership is owned equally by Kayla and Lisa.  Kayla’s basis is $20,000 at the beginning of the tax year.  Lisa’s basis is $16,000 at the beginning of the year.  KL reported the following income and expenses for the current tax year:

Sales revenue$150,000

Cost of sales80,000

Distribution to Lisa15,000

Depreciation expense20,000

Utilities14,000

Rent expense18,000

Long-term capital gain6,000

Payments to Mercy Hospital for Kayla’s medical expenses12,000

a.Determine the ordinary partnership income and separately stated items for the partnership

b.Calculate Kayla’s basis in her partnership interest at the end of the tax year. What items should Kayla report on her federal income tax return?

c.Calculate Lisa’s basis in her partnership interest at the end of the tax year.  What items should Lisa report on her Federal income tax return?


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