Andrew is a 1/3 partner in AJ&J Partnership. He received a guaranteed payment in the current year of $50,000. Partnership income before considering the guaranteed payment was $20,000. a.) What is Andrew’s share of the Partnership’s ordinary income or loss? b.) How is the $50,000 guaranteed payment Andrew received taxed to him?
|1.)||Andrew’s share of the Partnership’s ordinary income or loss|
|Partnership Income before guaranteed payment||20,000|
|Less: Guaranteed payment to Andrew||50,000|
|Partnership ordinary Income or (loss)||- 30,000|
|Andrew’s share of the Partnership’s ordinary loss||-10,000||(30,000 x 1/3)|
|2.)||Guaranteed payment Andrew received taxed to him|
|Andrew will report guaranteed payment received of $ 50,000 as income from partnership on his icnome tax return in Schedule E of Form 1040.|
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