Binita contributed property with a basis of $40,000 and a value of $50,000 to the BE Partnership in exchange for a 20% interest in partnership capital and profits. During the first year of partnership operations, BE had net taxable income of $30,000 and tax exempt interest income of $10,000. The partnership distributed $10,000 cash to Binita. Her adjusted basis (outside basis) for her partnership interest at year-end is:

$38,000

Explanation:

The computation of the adjusted basis for her partnership interest at year end is shown below:

= Property contributed + share in income - cash received in distribution

= $40,000 + ($30,000 + $10,000) × 20% - $10,000

= $40,000 + $40,000 × 20% - $10,000

= $40,000 + $8,000 - $10,000

= $38,000

We simply applied the above formula so that the adjusted basis could come

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20