This year, the Tastee Partnership reported income before guaranteed payments of $161,500. Stella owns a 40% profits interest and

Question

3 years ago

9

This year, the Tastee Partnership reported income before guaranteed payments of $161,500. Stella owns a 40% profits interest and

works 1,800 hours per year in the business. Euclid owns a 60% profits interest (with a basis of $30,000 at the beginning of the tax year) and performs no services for the partnership during the year. For services performed during the year, Stella receives a "salary" of $8,075 per month. Euclid withdrew $16,150 from the partnership during the year.
a. What is the amount of guaranteed payments made by the partnership this year?
b. How much is the partnership's ordinary income after any permitted deduction for guaranteed payments?
c. How much income will Stella and Euclid report?

Business

1 answer:

Aloiza [94] · Answer 1 · 2022-02-28T05:20:09+03:00

Answer

The answer and procedures of the exercise are attached in the image below.

Explanation

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.