The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $22,500, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results:

Sales revenue	$	95,200
Gain on sale of land (1231)	$	6,800
Cost of goods sold	$	(43,700	)
DepreciationMACRS	$	(18,000	)
Employee wages	$	(17,000	)
Cash charitable contributions	$	(4,700	)
Municipal bond interest	$	5,700
Other expenses	$	(3,800	)

a-1. How much ordinary income (loss) is allocated to Gary for the year?

a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss).

Description Total Amount 45% Allocated to GarySeparately

Stated Items on Schedule K-1:

Section 1231 gains $ $

Cash charitable contributions $ $

Guaranteed payment $ $

Municipal bond interest $ $

Self-employment income. $ $

b. Compute Garys share of self-employment income (loss) to be reported on his year 1 Schedule K-1, assuming G&P is a limited partnership and Gary is a limited partner.

c. What do you believe Garys share of self-employment income (loss) to be reported on his year 1 Schedule K-1 should be, assuming G&P is an LLC and Gary spends 2,000 hours per year working there full time?