How much is Zach's basis for his partnership interest after accounting for distributions and income?

To determine Zach's basis for his partnership interest, it's essential to consider his initial investment, any additional capital contributions, and the effects of distributions and income allocations. The basis of a partnership interest starts with the amount a partner initially invests in the partnership.

From that initial basis, adjustments are made for various factors:

1. Increases in Basis: These include any additional contributions made by Zach to the partnership and his share of the partnership's income.

2. Decreases in Basis: These occur from distributions received by Zach from the partnership and any losses allocated to him.

In this scenario, if Zach's basis after accounting for all these factors is determined to be $12,000, it means that after the adjustments were made (considering any increases or decreases mentioned), this represents the correct remaining basis for his investment in the partnership.

It’s also important to assess the context of the problem, including how distributions affect the basis. Distributions reduce a partner's basis as they represent withdrawal of capital from the partnership. Understanding the balance of these various elements enables accurate calculation of the partner's adjusted basis.

Thus, when determining the correct basis amount, $12,000 reflects the final adjusted figure after considering all relevant transactions impacting Zach