Yee manages Huang real estate,a partnership in which she is also a partner.She receives 40% of all partnership income before guaranteed payments,but no less than $80,000 per year.In the current year,the partnership reports $100,000 in ordinary income.What is Yee's distributive share and her guaranteed payment?

Question

Quizplus · Accepted Answer

Yee's distributive share will be 40% of the partnership income, which is $40,000. Her guaranteed payment is the minimum $80,000. Therefore, her total income from the partnership would be $80,000 (the guaranteed payment).  
However, since her distributive share is more than the guaranteed payment, she would receive the distributive share amount of $40,000. So, Yee's distributive share is $40,000 and her guaranteed payment is $80,000.

Thus, the correct choice is C.

Yee Manages Huang Real Estate,a Partnership in Which She Is