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29 September, 07:03

Stephanie is a 40% partner in the SKY Partnership. During the current tax year, the partnership reported ordinary income of $210,000 before payment of guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $30,000 to Stephanie and paid guaranteed payments to partners Stephanie, Kirsten, and Yule of $30,000 each ($90,000 total). What is Stephanie's share of the partnership's income? A. $88,000

B. $48,000

C. $78,000

D. $66,000

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  1. 29 September, 07:04
    0
    Option "C" is the correct answer to the following statement.

    Explanation:

    Given:

    Total Income before Partners Distribution = $210,000

    Total Distribution = %90,000

    Addition cash to Stephanie = 30,000

    Computation of Stephanie's Income:

    Amount after distribution = ($210,000 - $90,000)

    = $120,000

    Stephanie's Share = $120,000 x 40%

    = $48,000

    Stephanie's Total income = Stephanie's Share in distribution + guaranteed payment

    = $48,000 + $30,000

    = $78,000
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