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Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2018, the adjusted b

Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2018, the adjusted basis in her YZ interest was $95,000. For 2018, 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 2019, 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.

A) How much partnership income will Zelda report on her 2019 return? Assume the excess business loss limitation does not apply.

B) Compute Zelda’s adjusted basis in her YZ interest at the end of 2019.

Apr 03 2020 View more View Less

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