G is a 50% general partner and L is a 50% limited partner in the GL limited partnership.The partnership's ordinary business income for the year is $60,000.G receives a guaranteed payment of $15,000 for managing the partnership and L receives a guaranteed payment of $5,000 for helping to arrange some financing for GL.How much of this income is subject to the self-employment tax?

Question

Quizplus · Accepted Answer

- G's distributable income: $60,000 x 50% = $30,000
- G's guaranteed payment: $15,000
- G's total income: $30,000 + $15,000 = $45,000
- L's distributable income: $60,000 x 50% = $30,000
- L's guaranteed payment: $5,000
- L's total income: $30,000 + $5,000 = $35,000
Only G's distributable income and guaranteed payment are subject to self-employment tax, so the answer is $45,000 for G and $5,000 for L.

G Is a 50% General Partner and L Is a 50