Samuel is the managing general partner of STU in which he owns a 25% interest. For the year, STU reported ordinary income of $400,000 (after deducting all guaranteed payments). In addition, the LLC reported interest income of $12,000. Samuel received a guaranteed payment of $120,000 for services he performed for STU. How much income from self-employment did Samuel earn from STU?
A) $100,000
B) $120,000
C) $220,000
D) $223,000

Question

Quizplus · Accepted Answer

Samuel's self-employment income includes his share of the ordinary income and the guaranteed payment. His share of the ordinary income is 25% of $400,000, which is $100,000. Adding the guaranteed payment of $120,000, his total self-employment income is $220,000. Interest income is not included in self-employment income.

Samuel Is the Managing General Partner of STU in Which