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Sean and Connie are considering starting a manufacturing business. Each will contributed $200,000 and own 50% of the business. They believe their net taxable income

Sean and Connie are considering starting a manufacturing business. Each will contributed $200,000 and own 50% of the business. They believe their net taxable income from ordinary business activities will be $500,000 in the first year (2023). Neither will receive a salary, but they plan to have the business distribute $100,000 to each of them at the end of the first year. The business will pay wages of $400,000 to employees other than Sean and Connie and has $650,000 of undepreciated basis in assets at the end of the first year. Sean and Connie are both single, neither has other income, and both will use the standard deduction.

Assuming Sean and Connie decide to organize as a partnership, calculate each owner's total taxable income for the year.

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