DEF Services is owned by individuals, Mac, Norm, Otto, and Paul. They share profits and losses 40:30:15:15. Mac and Norm have tax years ending 6/30. Otto and Paul use the calendar year.

The partnership’s activities for the tax year ending 6/30/-Y2 are:

Sales

$350,000

Cost of goods sold

$150,000

Jobs credit

$8,000

§1231 gain, 10-15-Y1

$60,000

Muni Bd interest

$24,000

Charitable contribution

$6,000

Tasks:

a). Allocate the partnership’s income and other receipts/payments to its four partners for their tax years ending in Year 2.
b). Mac received guaranteed payments of $12,000 per month through the year ending 6/30/ (Y2). Norm received guaranteed payments of $1,500 per month for the year ending 6/30/Y2. Otto and Paul each receive capital account withdrawals of $7,500 per month. Allocate the partnership’s income and other receipts/payments to its four partners for their tax years ending in Y2.