For the current year, Gamma Partnership has $60,000 net operating revenues before consideration of any payment to its two equal partners, G and H.During the year, Gamma made a $25,000 guaranteed payment to Partner G.It also distributed $5,000 cash to both G and H.Gamma and its two partners all use the calendar year for tax purposes.Based on these facts, how much partnership income should G and H report on their current year individual returns?

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The $25,000 guaranteed payment to G is deductible from the partnership's net operating revenues, so the remaining amount of $35,000 ($60,000 - $25,000) is split equally between G and H, resulting in each partner having a distributive share of $17,500. In addition, both partners also received $5,000 each in cash distributions, which is not included in the partnership income. Therefore, G's total income from the partnership would be $42,500 ($17,500 + $25,000), and H's total income from the partnership would be $17,500 ($17,500 + $0).

For the Current Year, Gamma Partnership Has $60,000 Net Operating