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for the tax year, OPQ partnership reported $42000 net ordinary income, $5000 intert income, $600 charitable...

for the tax year, OPQ partnership reported $42000 net ordinary income, $5000 intert income, $600 charitable contribution, and $18000 179 deduction. Pat is a general partner who owns a 20% interest in OPQ. In addition to her share of ordinary income, she received a $12000 guaranteed payment and had a $0 of distributions during the year. what is the amount of Play's self employment income from OPQ?

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Answer #1

Let us Consider the case facts:

Pat received the guarantee payment of $12,000.

Pat also owns 20% of the interset in OPQ and hence also the net profits thereafter

So, Net profit for OPQ is the difference of income and deductions

Net Profit = $42,000-$18,000

Net Profit = $​24,000

Therefore

Pat’s self-employment income from OPQ is the sum of guaranteed payment and profits share of 20%

=$12,000 + ($24,000*20%) = $16,800

Upvote if you are served.

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