Rose is a 50% partner in Wren Partnership.During the year, Wren earned net profit of $100,000 ($210,000 gross income - $110,000 operating expenses) and distributed $20,000 to each partner.Rose must report Wren Partnership profit of $20,000 on her Federal income tax return.

Question

Quizplus · Accepted Answer

Rose must report her share of the partnership's net profit, which is 50% of $100,000, equaling $50,000, not just the distributed amount.

Rose Is a 50% Partner in Wren Partnership