An accountant performed services for EZ partnership and, in lieu of her normal fee, accepted a 10 percent unrestricted capital interest in the partnership with a fair market value of $7,500.How much income from this arrangement should the accountant report on her tax return?

Question

Quizplus · Accepted Answer

When an individual performs services in exchange for a partnership interest, the fair market value of the partnership interest received is considered income. In this case, the accountant should report $7,500 as income, which is the fair market value of the 10 percent capital interest received in the partnership.

An Accountant Performed Services for EZ Partnership And, in Lieu