Ask Question
3 September, 09:20

n the current year, the POD Partnership received revenues of $200,000 and paid the following amounts: $50,000 in rent and utilities, and $20,000 as a distribution to partner Olivia. In addition, the partnership earned $6,000 of long-term capital gains during the year. Partner Donald owns a 50% interest in the partnership. How much and what type (s) of income must Donald report for the tax year?

+5
Answers (1)
  1. 3 September, 09:46
    0
    Answer: $75,000 ordinary income; $3,000 of long-term capital gains.

    Explanation:

    From the question, we are told that the POD Partnership received revenues of $200,000 and paid $50,000 in rent and utilities, and $20,000 as a distribution to partner Olivia. Also, the partnership earned $6,000 of long-term capital gains during the year and that Partner Donald owns a 50% interest in the partnership.

    From the question, the ordinary income of the firm will be the difference between the revenue gotten and the $50,000 paid in rent and utilities which is an expense. This will be:

    = $200000 - $50000

    = $150000

    The income from capital gain = $6000

    Since, Donald will get 50% of what the partnership makes, thus will be:

    50% of $150,000 ordinary income which is (50/100 * $150,000) = $75,000 and 50% of $6000 capital gain which will be $3,000.

    = 50

    Therefore, Donald will get $75000 of the ordinary income and $ 3000 of the capital gain.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “n the current year, the POD Partnership received revenues of $200,000 and paid the following amounts: $50,000 in rent and utilities, and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers