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7 - Calculate a partnership's taxable income and separately stated items and describe how the partnership's income is reported., 9 - Determine a...

LO.7 - Calculate a partnership's taxable income and separately stated items and describe how the partnership's income is reported., 9 - Determine a partner's basis in the partnership interest., 10 - Explain how liabilities affect a partner's basis. Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income$400,000Interest income4,000Short-term capital loss6,000Long-term capital gain12,000Charitable contribution4,000Cash distribution to Amy20,000Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner, what is Amy's basis in her LLC interest:a. At the beginning of the year?b. At the end of the year?

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