Wayne owns a 25% interest in the capital and profits of Emerald Company (a calendar year partnership).For tax year 2011,the partnership earned revenue of $600,000 and had operating expenses of $300,000.During the year,Wayne withdrew from the partnership a total of $64,000.He also invested an additional $20,000 in the partnership.For 2011,Wayne's gross income from the partnership is:

Question

Quizplus · Accepted Answer

To calculate Wayne's gross income from the partnership, we need to follow these steps:

1. Calculate the partnership's net income:
Revenue - Expenses = Net Income
$600,000 - $300,000 = $300,000

2. Calculate Wayne's share of the partnership's net income:
$300,000 x 25% = $75,000

3. Add Wayne's withdrawals to his share of the net income:
$75,000 + $64,000 = $139,000

4. Subtract Wayne's additional investment in the partnership:
$139,000 - $20,000 = $119,000

Therefore, Wayne's gross income from the partnership for tax year 2011 is $75,000.

Wayne Owns a 25% Interest in the Capital and Profits