Problem: John and Mary are equal partner in a partnership. John's beginning basis is 80,000 and Mary's beginning basis is 100,000
Sales 250,000
Long term capital loss -5,000
Short term capital gain 4,000
Salaries 8,000
Rent Expense 24,000
Interest income 6,000
Section 179 expense 20,000
Distribution to Mary 30,000
Medical expenses for John
Paid by partnership 40,000
1. Calculate ordinary income
2. Calculate Separately Reported Items
3. Calculate ending basis for John and Mary.