The partnership agreement of the G P general partnership states that Gary will receive a guaranteed payment of $14,500, 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 (An answer representing a loss should be entered as a negative number ) Sales revenue $ 85,500 Gain on sale of land (1231) $ 7,900 Cost of goods sold $ (43,200 ) DepreciationMACRS $ (16,300 ) Employee wages $ (19,400 ) Cash charitable contributions $ (5,100 ) Municipal bond interest $ 4,800 Other expenses $ (5,200 ) a 1 How much ordinary income (loss) is allocated to Gary for the year a 2 What are Garys separately stated items for the year 1 Schedule K 1, including his self employment income (loss) 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

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 03, 2024

The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,500, and that Gary and Prudence will share

The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,500, 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: (An answer representing a loss should be entered as a negative number.)


Sales revenue	$	85,500
Gain on sale of land (1231)	$	7,900
Cost of goods sold	$	(43,200	)
DepreciationMACRS	$	(16,300	)
Employee wages	$	(19,400	)
Cash charitable contributions	$	(5,100	)
Municipal bond interest	$	4,800
Other expenses	$	(5,200	)

a-1.

How much ordinary income (loss) is allocated to Gary for the year?

a-2.

What are Garys separately stated items for the year 1 Schedule K-1, including his self-employment income (loss)?

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?