Sandburg and Williams are the owners of a partnership that manufactures commercial lighting fixtures. Profits are allocated among the partners as follows:

Sandburg was divorced as of the beginning of 2015 and as part of the divorce stipulation agreed to the following:
1. The spouse is to receive annual distributions traceable to years 2015 and 2016. The annual distribution is to be the greater of $100,000 or 25% of base earnings.
2. Base earnings are defined as net income of the partnership less:
(a) Salaries traceable to Sandburg and Williams of $75,000 and $125,000, respectively, and
(b) Bonus to Sandburg as stated subject to the limitation that it not exceed $50,000.
3. Sandburg€™s spouse would receive a distribution from the partnership on August 31 of each current year and on February 28 of each subsequent year. The August 31 target distribution is $50,000. If the August distribution is less than $50,000, Sandburg€™s spouse will receive one-half year€™s interest on the deficiency at the rate of 10% per year. The following distribution on February 28 must be of an amount such that the two distributions equal the required distribution traceable to the calendar year just ended plus any interest associated with the August distribution.
4. All distributions to Sandburg€™s spouse are to be considered as a withdrawal of capital by Sandburg.
5. Aside from distributions to Sandburg€™s spouse, Sandburg€™s annual withdrawals cannot exceed $125,000.

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Sandburg Williams Salaries...._ . . . . Bonus as a percentage of net income after the bonus . . . . .. . . . . . .. Interest on weighted-average capital including withdrawals and $100,000 25,000 0% 10% excluding currentyear profits. 5% 5%