The Bartlo Partnership has income for the year ending December 31, 2020 of $490,000. As per the partnership agreement, this amount has been determined under generally accepted accounting principles. The agreement also calls for each of the two partners to have an equal share in this income. The following amounts are included in the calculation of this income figure: • Non-eligible dividends received of $32,000
• Gains on the sale of shares of $96,000
• Charitable donations of $12,000
• Amortization on equipment of $49,000 (equal to CCA)
The two partners will each have Taxable Income for the 2020 taxation year of:
A)$227,000.
B)$229,400.
C)$223,400.
D)$245,000.

Question

Quizplus · Accepted Answer

To determine the taxable income for each partner, we need to first calculate the partnership's net income.

Net income = income - (non-eligible dividends + charitable donations + amortization)

Net income = $490,000 - ($32,000 + $12,000 + $49,000)

Net income = $397,000

Since the two partners share the income equally, each partner's share of the net income is $397,000 / 2 = $198,500.

To calculate each partner's taxable income, we need to add or subtract any other income or deductions that the partner may have. Since no such information is given in the question, each partner's taxable income is simply their share of the net income:

Partner 1: $198,500
Partner 2: $198,500

Therefore, the answer is B) $229,400.

The Bartlo Partnership Has Income for the Year Ending December