Ricardo is the marketing manager and owns a 40% interest in the Fielder Partnership. Fielder's taxable income before considering payments to partners is $80,000. Ricardo withdraws $40,000 for his personal living expenses. How much income must Ricardo report from Fielder?

Question

Quizplus · Accepted Answer

Ricardo must report his share of the partnership's taxable income, not the amount he withdraws for personal expenses. His share is 40% of $80,000, which equals $32,000.

Ricardo Is the Marketing Manager and Owns a 40% Interest