Nash and Ford are partners who share profits and losses equally. For the year ended December 31, 2014, the partnership had book income of $80,000 which included the following deductions: What amount should be reported as ordinary income on the partnership return for 2014?

Question

Quizplus · Accepted Answer

The $80,000 book income includes deductions of $5,000 charitable contributions and $15,000 long-term capital loss. Therefore, the partnership's ordinary income is $80,000 + $15,000 = $95,000. As Nash and Ford share profits and losses equally, each partner's share of ordinary income would be $47,500.

Nash and Ford Are Partners Who Share Profits and Losses