Question

Lydia and Ellen own the LE Partnership. Lydia takes care of daily operations and receives a guaranteed payment for her efforts. What amount and character of income will each partner report in each of the following independent situations?
a) The LE Partnership has no ordinary income and reports a $100,000 short-term capital gain. Lydia receives a $40,000 guaranteed payment plus a 40% distributive share of all partnership income after deducting the guaranteed payment.
b) The LE Partnership reports $160,000 of ordinary income before considering any guaranteed payment. Lydia receives 60% of partnership income but not less than $110,000.

Answer 1

Situation A
LE Partnership Income
Business	-
(+) Capital gain	100,000
Total Income	100,000
Partners Income
Particulars	Lydia	Ellen
Salary	40,000	-
Business Income - Share of profit	30,000	70,000
Total	70,000	70,000

Situation C
Partnership Income
Ordinary Income	1,60,000
(-) Guranted Payment to Pam	-35,000
Total Income	1,25,000
Partners Income
Particulars	Lydia	Ellen
Salary	35,000	-
Business Income - Share of profit	75,000	50,000
Total	110,000	50,000

Please give me an UP THUMB.