The dairy partnership is owned equally to dan and jim. jims basis is 14,000 at the beginning of the tax year. dans basis is 9,000 at the beginning of the tax year. Dairy partnership reported the following income and expenses for the current tax year:
Sales 90,000
Cogs 45,000
guaranteed payment to dan 24,000
depreciation expense 12,500
utilities 15,000
rent expense 16,000
interest income 3,000
tax exempt interest income 4,500
payment for jims medical expenses 10,000
(Jims basis of 14,000 includes his share of partnership liabilities)
A. Determine the ordinary partnership income (loss) and separately stated items for the partnership.
b. Calculate Dans basis in his partnership interest at the end of the tax year. What items should dan report on his Federal income tax return
c. Calculate Jim's basis in his partnership interest at the end of the tax year. What items should Jim report on his Federal income tax return.