Meagan is a 40% general partner in the calendar year,cash basis MKK Partnership.The partnership received $100,000 income from services and paid the following other amounts:

How much is Meagan's adjusted gross income increased as a result of the above items?

Question

Meagan is a 40% general partner in the calendar year,cash basis MKK Partnership.The partnership received $100,000 income from services and paid the following other amounts:

How much is Meagan's adjusted gross income increased as a result of the above items?

Quizplus · Accepted Answer

The $20,000 payment to Meagan is a guaranteed payment and is deductible by the partnership.The $8,000 payment to Kaylyn is deductible under § 707(a),since it was paid during the year.The distributions to Kristen and Kaylyn are not deductible by the partnership.The partnership's ordinary income,then,is $32,000.
 11ea7f05_2e87_62fd_92e1_c9715eb1aa28_TB4123_00 Of this $32,000 partnership income,40%,or $12,800,is allocated to Meagan.She must also include the $20,000 guaranteed payment in her gross income this year,since she and the partnership use the same reporting period.

Meagan Is a 40% General Partner in the Calendar Year,cash