If Sejal contributes $50,000 in cash and $120,000 in equipment to a partnership and has a share of income of $15,000, what is Sejal's total basis?

To determine Sejal's total basis in the partnership, we need to consider the contributions she made along with her share of the income.

Sejal contributed $50,000 in cash and $120,000 in equipment. When calculating basis, both cash contributions and the fair market value of non-cash property, like equipment, are included.

First, we add the cash contribution to the fair market value of the equipment:

• Cash contribution: $50,000

• Equipment contribution: $120,000

This gives us a subtotal of $170,000 for the contributions alone.

Next, we add Sejal's share of partnership income, which is $15,000. This income increases her basis since it represents her share of the profits from the partnership.

Therefore, the calculation for Sejal's total basis is as follows:

$50,000 (cash) + $120,000 (equipment) + $15,000 (share of income) = $185,000.

This total is her adjusted basis in the partnership, which is why the correct answer is $185,000.