The amount that each partner withdraws from a partnership
A)cannot exceed the net income reported by the partnership.
B)is usually determined by the amount of the net income.
C)is the base on which federal income taxes are levied on the partnership income.
D)should be specified in the partnership agreement.

Question

Quizplus · Accepted Answer

The amount that each partner can withdraw from a partnership should be specified in the partnership agreement. This ensures that there is clarity and consensus among the partners regarding the distribution of profits and also helps in avoiding any disputes that may arise. While the amount each partner can withdraw may be influenced by the net income of the partnership, it is not a strict determinant. The amount withdrawn by each partner is not the base on which federal income taxes are levied on the partnership income.

The Amount That Each Partner Withdraws from a Partnership