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W is a partner in the equal WXYZ partnership. At the beginning of the year, his basis in his partnership interest

is $40,000. On Feb. 1, W takes a draw against earnings of $30,000. On June 1, the partnership pays off $60,000 of debt. On Sept. 1, W gets a distribution of cash of $30,000 that is not a draw against earnings. The partnership’s income from the year is $200,000. What is the effect of each of these items on W’s basis?

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Dear Student Please find... View the full answer

Accounting - 8207980.doc

W is an equal partner in WXYZ partnership.
The $30,000 withdraw against earnings and his share in the
payment of Debt i.e. $60,000/4 =$15,000 are treated as a distribution on
the last day of...

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