Ask Question
30 December, 21:45

Molly is a 30% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $200,000 before payment of guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $20,000 to Molly, and paid guaranteed payments to partners Molly, Amber, and Pat of $20,000 each ($60,000 total guaranteed payments). How much will Molly's adjusted gross income increase as a result of the above items? a. $42,000 b. $60,000 c. $62,000 d. $80,000

+5
Answers (1)
  1. 30 December, 21:52
    0
    The answer is: C) $62,000

    Explanation:

    The partnership had a total ordinary income of $200,000. It made guaranteed payments to its three partners (Molly, Amber and Pat) of $20,000 each ($60,000 in total).

    So the partnership adjusted income is reduced to $140,000, out of that amount, 30% belongs to Molly. Molly's share of the partnership adjusted income is $42,000.

    Molly's total earnings from the partnership are $62,000 ($20,000 + $42,000)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Molly is a 30% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $200,000 before ...” 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