Salix Associates is a partnership with an October 31 year-end.For the fiscal year ended October 31,2017,Salix Associates reported ordinary income of $100,000,after deducting guaranteed payments.Max,a calendar year taxpayer,is a 30 percent partner in the partnership and received $2,000 monthly as a guaranteed payment for the calendar year 2016,and $2,100 monthly for the calendar year 2017.What is the total income from the partnership that Max should report on his 2017 individual income tax return?

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Quizplus · Accepted Answer

The partnership's fiscal year ended October 31, 2017, so Max's share of the partnership's ordinary income for the calendar year 2017 is 30% of $100,000, or $30,000. Max also received $2,100 monthly as a guaranteed payment for the calendar year 2017, which totals $25,200. Therefore, Max's total income from the partnership that he should report on his 2017 individual income tax return is $30,000 + $25,200 = $55,200.

Salix Associates Is a Partnership with an October 31 Year-End