LO3 Estel and Raymond own the GoalLine Partnership. Estel owns 70% of the business.

She provided the capital for it and consults with Raymond on overall business strategy. Raymond is responsible for the daily operation of the business and owns the remaining 30%. The business consistently produces net income of $200,000 per year. Each year, Estel withdraws $30,000 from the partnership and Raymond withdraws

$70,000. Although Estel believes that Raymond is entitled to receive more cash each year because of his daily involvement in the business, she is concerned that she is taxed on 70% of the income. Estel has come to your firm for advice on how to improve their situation. Leonard, your supervisor, has assigned you the task of coming up with a strategy that will result in Estel’s having less income from Goal-

Line. Write Leonard a memorandum explaining a strategy that GoalLine can use to reduce the income taxed to Estel without altering the current profit-sharing ratio.