Question

Jimbo buys a 40% partnership interest from Fisher for $100,000. Fisher's outside basis in the partnership was $60,000 at the time of sale, and Fisher's share of the inside basis of the assets in the partnership (his tax capital account) was $40,000. The partnership has $20,000 of debt. What is Jimbo's outside basis in the partnership interest

Answer 1

Answer:

$8,000

Explanation:

Data provided as per the given information :-

Partnership debt = $20,000

Partnership interest percentage = 40%

The computation of partnership interest is shown below:-

Partnership interest = Partnership debt × Partnership interest percentage

= $20,000 × 40%

= $20,000 × 0.40

= $8,000

Therefore, for computing the partnership interest we simply multiply partnership debt with partnership interest percentage.