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 $400,000 in ordinary income.What is Yee's distributive share and her guaranteed payment?

Question

Quizplus · Accepted Answer

Yee's distributive share is 40% of the partnership's income, which is $160,000 (40% x $400,000). However, her guaranteed payment is no less than $80,000 per year. Since her distributive share is already above $80,000, her guaranteed payment is simply $80,000. Therefore, Yee's total income for the year is $240,000 ($160,000 + $80,000).

The answer can also be expressed as:

Yee's distributive share = $160,000 
Yee's guaranteed payment = $80,000 
Yee's total income = $240,000

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