Rhonda Has a 30% Interest in the Capital and Profits

Rhonda has a 30% interest in the capital and profits of the ABC Partnership.In the first year of the partnership,2014,it earned $150,000.However,the partners agreed that nothing would be distributed until after the end of March 2015,before Rhonda filed her 2014 tax return.The distributions were to be delayed because it was unclear as to whether business conditions would remain good in 2015.Things were going well in 2015 and therefore the partnership distributed $30,000 to Rhonda at the end of March,as a portion of her share of the partnership's 2014 earnings.The partnership's income for 2015 was $60,000.As a result,Rhonda must recognize $30,000 of gross income in 2014 and $18,000 in 2015.