Mark is a cash basis taxpayer.He is a partner in the M&M partnership, and his share of the partnership's profits for 2019 is $90,000.Only $40,000 was distributed to him in January 2019, and this was his share of the 2018 partnership profits.None of the 2019 profits was distributed.Mark's gross income from the partnership for 2019 is $40,000.

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Mark's share of the partnership's profits for 2019 is $90,000, but only $40,000 was distributed to him in January 2019 as his share of the 2018 profits. This means that he still has $50,000 of undistributed profits from the partnership for 2019, which should be included in his gross income for 2019 as a cash basis taxpayer. Therefore, his gross income from the partnership for 2019 is $90,000, not $40,000.

Mark Is a Cash Basis Taxpayer