April,a calendar year taxpayer,is a 40% partner in Pale Partnership,whose fiscal year ends on September 30th.For the fiscal year ending September 30,2014,the partnership had $400,000 net income and for fiscal year ending September 30,2015,the partnership had $300,000 net income.April withdrew $100,000 in December of each year.April's gross income from the partnership for 2014 is $160,000 ($400,000 × 40%).

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April is taxed on her share of the profits ($160,000)for the partnership's tax year that ends within her calendar tax year.The withdrawals of $100,000 are a distribution of her capital investment,a nontaxable recovery of her capital.

April,a Calendar Year Taxpayer,is a 40% Partner in Pale Partnership,whose