Question
Partnership EFGH is a calandar year, accual basis partnership. Partner G is a calendar year, cash basis patner. Partnership EFGH rents property from Partner G.
Partnership EFGH is a calandar year, accual basis partnership. Partner G is a calendar year, cash basis patner. Partnership EFGH rents property from Partner G. EFGH pays market rate rent of $4,000 per month. EFGH also pays G a guaranteed payment of $10,000 per onth for services performed.
The following transactions occured near year end:
* The December rent payment for the current year was not received by G until January 5th of the subsequent year.
* The December guaranteed payment was not received by G untill January 10th of the suqsequent year.
1. In what tax year should EFGH deduct the December rent payment and in what year should G include this payment in his tax return?
2. In what year should EFGH deduct the December guaranteed payment and in what year should G include this payment in tax return?
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