Question

Stephanie is a 40% partner in the SKY Partnership. During the current tax year, the partnership reported ordinary income of $210,000 before payment of guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $30,000 to Stephanie and paid guaranteed payments to partners Stephanie, Kirsten, and Yule of $30,000 each ($90,000 total). What is Stephanie's share of the partnership's income?A. $88,000
B. $48,000
C. $78,000
D. $66,000

Answer 1

Answer:

Option "C" is the correct answer to the following statement.

Explanation:

Given:

Total Income before Partners Distribution = $210,000

Total Distribution = %90,000

Addition cash to Stephanie = 30,000

Computation of Stephanie's Income:

Amount after distribution = ($210,000 - $90,000)

= $120,000

Stephanie's Share = $120,000 x 40%

= $48,000

Stephanie's Total income = Stephanie's Share in distribution + guaranteed payment

= $48,000 + $30,000

= $78,000