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, 2018, the partnership had $400,000 net income and for fiscal year ending September 30, 2019, the partnership had $300,000 net income. April withdrew $100,000 in December of each year. April's gross income from the partnership for 2018 is $160,000 ($400,000 × 40%).

Question

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April's share of the partnership's net income for fiscal year ending September 30, 2018 is $160,000 ($400,000 × 40%). Since April withdrew $100,000 in December 2018, her gross income from the partnership for 2018 is $60,000 ($160,000 - $100,000).

April, a Calendar Year Taxpayer, Is a 40% Partner in Pale