At the beginning of 20X3, Margaret’s adjusted basis in her 30 percent interest in MP Partnership, a calendar year general partnership, was $10,000. During 20X3, Margaret did not make any additional contributions to MP Partnership, and Margaret’s share of MP Partnership liabilities did not change. During 20X3, MP Partnership distributed $5,000 to Margaret, and MP Partnership had the following items of partnership income, deduction, gain and loss for 20X3:
Nonseparately stated taxable income $15,000
Tax-exempt interest $6,000
Capital loss ($20,000)
What is Margaret’s adjusted basis in her partnership interest in MP Partnership at the end of 20X3?
a. 0.
b. $10,000.
c. $15,000.
d. $25,000.
