For the year ended December 31, 2011, the partnership of Charles and Paul had book income...
For the year ended December 31, 2011, the partnership of Charles and Paul had book income of $75,000, which included the following: (a) Short-term capital loss, $3,100; (b) Long-term capital gain (on sale of securities), $4,300; (c) Section 1231 gain, $1,500; (d) Ordinary income (Section 1245 recapture), $600; and (e) Domestic dividends, $1,000. The partners share profits and losses equally. What is each partner’s share of partnership taxable income (excluding all partnership items which must be accounted for separately) to be reported as taxable for 2011?
|
a. |
$35,700 |
|
b. |
$36,050 |
|
c. |
$35,650 |
|
d. |
$37,500 |
|
e. |
None of the above |
Homework Answers
Ans- The correct option is d)-$37,500
Explanation:-
| Book Income | $75,000 |
| Add:Ordinary Income | $600 |
| Add: Domestic dividends | $1,000 |
| Add: Section 1231 gain | $1,500 |
| Less:Short-term capital loss | $3,100 |
| Total Taxable Income | $75,000 |
Taxable income of each partner:-
As they are sharing profits & loss equally so each partner's income will be =$ 75,000/2 = $37,500
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