Gary sold securities for a $70,000 short-term capital loss during the current year, but he has no personal capital gains to recognize. The G&A General Partnership in which Gary has a 50% capital, profits, and loss interest, reported a $82,000 short-term capital gain this year. In addition, the partnership earned $198,000 of ordinary income. Gary's only partner, Ann, agrees to divide the year's income as follows: (Click the icon to view the partners' share of income.) Both partners and the partnership use a calendar year-end, and both partners have a 32% marginal tax rate. Read the requirements. Requirement a. Have the partners made a special allocation of income that has substantial economic effect? because the This special allocation fails the substantial economic effect test and will not be acceptable to the IRS. In particular, shifting occurs special allocation does not alter the partners' capital accounts, and the special allocation reduces the partners' total tax liability. Requirement b. What amount and character of income must each partner report on his or her tax return? Character Gary Ann 0 Data Table Short-term capital gain Ordinary income Type of Income Enter any number in the edit fields and then click Check Answer. S Short-term capital gain Ordinary income Total 82,000 $ 198,000 Gary 70,000 $ 70,000 Ann 12,000 128,000 All parts showing Cle