Wayne owns a 30% interest in the capital and profits of Emerald Company (a calendar year partnership).For tax year 2016,the partnership earned revenue of $900,000 and had operating expenses of $660,000.During the year,Wayne withdrew from the partnership a total of $90,000.He also invested an additional $30,000 in the partnership.For 2016,Wayne's gross income from the partnership is:
A)$72,000.
B)$90,000.
C)$132,000.
D)$162,000.
E)None of these.

Question

Quizplus · Accepted Answer

Wayne's share of the partnership's net income is 30% of ($900,000 - $660,000) = 30% of $240,000 = $72,000. Withdrawals and additional investments do not affect the gross income calculation.

Wayne Owns a 30% Interest in the Capital and Profits