Question

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Turtle Creek Partnership had the following revenues, expenses, gains, losses, and distributions:

Sales revenue	$	63,000
Long-term capital gains	$	3,100
Cost of goods sold	$	(19,500	)
Depreciation—MACRS	$	(3,950	)
Amortization of organization costs	$	(1,920	)
Guaranteed payments to partners for general management	$	(13,300	)
Cash distributions to partners	$	(4,500	)

a. Given these items, what is Turtle Creek’s ordinary business income (loss) for the year?

b. What are Turtle Creek’s separately stated items for the year? (Select all that apply.)

Answer 1

Answer:

Description	Amount($)
Sales revenue	63,000
Less-
Cost of goods sold	-19,500
Depreciation - MACRS	-3,950
Amortization of organization costs	-1,920
Guaranteed payments	-13,300
a. Ordinary Business Income	24,330
b. Separately Stated Items on Schedule K-1:
Long-term capital gains	3,100
Guaranteed payments	13,300
Cash distributions	4,500