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 would be 40% of the partnership income:
0.4 x $400,000 = $160,000

However, since her guaranteed payment is $80,000, she will receive that amount regardless of the partnership's income.

Therefore, Yee's distributive share is $160,000 and her guaranteed payment is $80,000. This corresponds to choice B.

Yee Manages Huang Real Estate, a Partnership in Which She