April, a calendar year taxpayer, is a 40% partner in Pale Partnership, whose fiscal year ends on September 30th.For the fiscal year ending September 30, 2019, the partnership had $400,000 net income and for fiscal year ending September 30, 2020, the partnership had $300,000 net income.April withdrew $100,000 in December of each year.April's gross income from the partnership for 2019 is $160,000 ($400,000 × 40%).

Question

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Since April is a 40% partner in Pale Partnership, her share of the partnership's net income for the fiscal year ending September 30, 2019 is $160,000 ($400,000 × 40%). As a calendar year taxpayer, she must report this income on her 2019 tax return, even though the partnership's fiscal year ends in September. Her withdrawal of $100,000 in December does not affect the calculation of her gross income from the partnership.

April, a Calendar Year Taxpayer, Is a 40% Partner in Pale