Alice is a partner in Axel Partnership. Her share of the partnership's current ordinary business income was $100,000. She received a $60,000 cash distribution from the partnership on December 1. Alice qualifies for the Section 199A deduction, without regard to the wage limitation. Assuming that Alice's marginal tax rate is 37%, calculate her after-tax cash flow from the partnership this year.

Question

Quizplus · Accepted Answer

$60,000 cash received - $29,600 tax [($100,000 - $20,000 Section 199A deduction) × 37%].

Alice Is a Partner in Axel Partnership