When computing the partnership's ordinary income, a deduction is allowed for
A)contributions to charitable organizations.
B)net operating losses.
C)net short-term capital losses.
D)guaranteed payments to partners.

Question

Quizplus · Accepted Answer

Guaranteed payments to partners are deductible when computing the partnership's ordinary income. Contributions to charitable organizations are deductible on the partners' personal tax returns, not the partnership's. Net operating losses and net short-term capital losses are carried forward or back and utilized in future or prior years, but they are not deductible in the current year for computing ordinary income.

When Computing the Partnership's Ordinary Income, a Deduction Is Allowed