Question

Burgundy, Inc., and Violet Gomez are equal partners in the calendar year BV LLC. Burgundy uses a fiscal year ending April 30, and Violet uses a calendar year. Burgundy receives an annual guaranteed payment of $100,000 for use of capital contributed by Burgundy. BV's taxable income (after deducting Burgundy's guaranteed payment) is $80,000 for 2021 and $90,000 for 2022.
a. How much income from BV must Burgundy report for its tax year ending April 30, 2015?
b. How much income from BV must Violet report for her tax year ending December 31, 2015?

Answer 1

Answer:

A. $140,000

B. $45,000

Explanation:

a. Calculation to determine How much income from BV must Burgundy report for its tax year ending April 30, 2015

Using this formula

Income from BV=Annual guaranteed payment+(BV's taxable income*50% Distributive share of the partnership)

Let plug in the formula

Income from BV=$100,000+($80,000*50%)

Income from BV=$100,000+$40,000

Income from BV=$140,000

Therefore The Amount of income from BV that Burgundy must report for its tax year ending April 30, 2015 is $140,000.

B. Calculation to determine How much income from BV must Violet report for her tax year ending December 31, 2015

Using this formula

Income from BV=(BV's taxable income*50% Distributive share of the partnership)

Let plug in the formula

Income from BV=($90,000*50%)

Income from BV=$45,000

Therefore The Amount of income from BV that Burgundy must report for its tax year ending December 31, 2015 is $45,000.