Rocky and Charlie form RC Partnership as equal partners. Rocky contributes $100,000 into RC while Charlie contributes real estate with a cost and fair market value of $100,000. During the current year, RC earned net income of $600,000. The partnership distributes $200,000 to each partner. The amount that Rocky should report on his individual tax return is

Question

Quizplus · Accepted Answer

Rocky should report his share of the partnership's net income, which is $300,000 (half of $600,000), on his individual tax return. Distributions do not affect the amount of income reported.

Rocky and Charlie Form RC Partnership as Equal Partners