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Required: Discuss what Engineering Partners will include in its tax return, and what affect this will have on Greg's income for tax purposes. Engineering Partners
Required: Discuss what Engineering Partners will include in its tax return, and what affect this will have on Greg's income for tax purposes. Engineering Partners is a partnership consisting of three partners: Greg, Harry, and Ingrid. For the current tax year Engineering Partners made an accounting profit of $4.5 million. This was however prior to taking into account the following adjustments as per the partnership agreement: * Greg is allocated a salary of $150,000 * Harry receives $50,000 as interest on his capital contribution * Ingrid receives $100,000 as interest on a loan she made to the partnership (the partnership used this money to purchase business equipment)
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