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Ben is a 50% partner in the BC partnership. BC uses a September 30th fiscal year-end....

Ben is a 50% partner in the BC partnership. BC uses a September 30th fiscal year-end. The partnership reported ordinary income of $200,000 for 2019 and $140,000 for 2020. Ben will report ordinary income for his tax year ending December 31, 2019 of:

        a.     $100,000.

        b.     $92,500.

        c.     $85,000.

        d.     $70,000.

        e.     None of the above.

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Answer #1

Ans:

Calculation of Ben's ordinary income tax year ending December 2019:

Ben's income from partnership Income 2019:

Partnership total Income : $200,000

Ben's Share : 50%

Period of Income for 2019: 9 Months (January to september)

Ben's income for 2019 Till september 2019 :

= $200,000*50%*9/12 = $75,000

Ben's income from partnership Income 2020:

Partnership total Income : $140,000

Ben's Share : 50%

Period of Income for 2019: 3 Months (October to December)

Ben's income for 2019 from October to December 2019 :

= $140,000*50%*3/12 = $17,500

Ben's ordinary income tax year ending December 2019: $75,000 + $17,500 = $92,500

So correct answer is option B.

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