Partner X Is A 50 Partner In The Xy Partnership That Has The Following Assets An 1

Partner X is a 50% partner in the XY Partnership that has the following assets and liabilities at year end. Assume the book basis and tax basis are the same amount.

Machine: Basis $9,000 Value $21,000

Land: Basis $80,000 Value $100,000

Note 1: Basis $15,000 Value $15,000

Note 2: Basis $90,000 Value $90,000

Depreciation on the building was allocated one-third to X and two-thirds to Y. Both notes are nonrecourse. If partner X has a negative capital account of ($5,000) and Y has a negative capital account of ($10,000), how much of the partnership’s taxable income of $18,000 will be allocated to partner Y?

$0

$6,500

$9,000

$12,000

Prof. Angela

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