Abby and Bob are partners in an equal general partnership. Abby has a basis of $70,000 in her partnership interest, and Bob has a basis of $30,000 in his partnership interest. Describe the effect of each of the following events on the basis of each partner’s partnership interest:
a) The partnership itself makes a charitable contribution of $8,000;
b) Each partner’s distributive share of partnership taxable income is $10,000;
c) The partnership has $18,000 in interest income from tax exempt municipal bonds; and
d) The partnership makes a cash distribution of $10,000 to each partner.
