Higlo Paints Is a Partnership That Reports an Operating Income

Multiple Choice

Higlo Paints is a partnership that reports an operating income of $50,000 in the current year. Higlo also has a $20,000 Section 1231 gain from the sale of a building and $10,000 in nondeductible expenses. Bernice owns 20% of Higlo and withdraws $5,000 from the partnership during the current year. Bernice's basis will increase by:

A) $5,000
B) $7,000
C) $9,000
D) $10,000
E) $12,000