LMN Partnership is owned equally by R and S, calendar year taxpayers.The partnership reports on a fiscal year ending October 31.During the calendar year 2010, the partnership earned $1,000 a month.During the calendar year 2012, the partnership earned $2,000 a month.During 2010 and 2012, R withdrew $300 a month.On his personal return for 2012, R will report income from the partnership of

Question

Quizplus · Accepted Answer

R's income from the partnership for 2012 is calculated based on the partnership's fiscal year ending in 2012, which includes 2 months from 2011 (November and December) and 10 months from 2012. For those 2 months in 2011, the income was $1,000 per month, totaling $2,000. For the 10 months in 2012, the income was $2,000 per month, totaling $20,000. The total income for the fiscal year is $22,000. Since R owns half of the partnership, R's share is $11,000.

LMN Partnership Is Owned Equally by R and S, Calendar