Brent is a limited partner in BC Partnership. His distributive share of partnership income and his guaranteed payment for the year are as follows:
Ordinary income $30,000
Short-term capital gain $18,000
Guaranteed payment $36,000
What is his self-employment income?
As per the relevant provosions, both incomes received from partnership (distributive share of partnership and guaranteed payment) will form part of self-employement income and is liable to self employement tax.
However, Short term capital gains dosen't form part of self employement income.
Hence, Brent's self employement income shall be computed as follows -
Ordinary income (distributive share of partnership) $30,000
+ Guaranteed payment $36,000
Total self employement income = $66,000
Hence, the correct answer is D) $66,000
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