DDP Partnership reported gross income from operations of $125,000, a long-term capital gain of $5,000, a short-term capital loss of $2,000, and a charitable contribution of $5,000. On its Schedule K, the partnership reports ordinary business income of $120,000, a long-term capital gain of $5,000, and a short-term capital loss of $2,000.

Question

Quizplus · Accepted Answer

The ordinary business income should be $118,000, not $120,000, because the charitable contribution of $5,000 should be subtracted from the gross income of $125,000.

DDP Partnership Reported Gross Income from Operations of $125,000, a Long-Term