In the current year, the ABC Partnership received income of $200,000 and paid the following amounts: $50,000
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In the current year, the ABC Partnership received income of $200,000 and paid the following amounts: $50,000 in rent and utilities and $20,000 as a distribution to a partner A. In addition, the partnership earned $6,000 of long-term capital gains during the year. Partner B owns a 50% interest in the partnership. How much income must partner B report for the tax year?
a. $68,000 ordinary income.
b. $78,000 ordinary income.
c. $65,000 ordinary income; $3,000 of long-term capital gains.
d. $75,000 ordinary income; $3,000 of long-term capital gains.
e. None of the above
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