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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Denise invested $30,000 this year to purchase a 20% interest

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Denise invested $30,000 this year to purchase a 20% interest in the DEF Partnership. The partnership reported $100,000 of net income from operations, a $6,000 short-term capital loss, and a $2,000 charitable contribution. In addition, the partnership distributed $10,000 to Denise and $20,000 each to partners Ed and Fran. Assuming the partnership has no beginning or ending liabilities, Denise’s basis in her partnership interest at the end of the year is $38,400.

True or False? Please explain
$30000+$20000(net income)-$1200(short term capital loss)-$400(charitable contribution)-$10000(distribution) = $38.400

Answer is true.
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