The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $17,600, 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	$	88,000
Gain on sale of land (1231)	$	8,700
Cost of goods sold	$	(35,700	)
DepreciationMACRS	$	(11,000	)
Employee wages	$	(20,000	)
Cash charitable contributions	$	(5,400	)
Municipal bond interest	$	5,400
Other expenses	$	(6,400	)

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

Ordinary income (loss)

a-2.	What are Garys separately stated items for the year 1 Schedule K-1, including his self-employment income (loss)? (Select all that apply.)

	Sales revenue Gain on sale of land ( 1231) DepreciationMACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses Guaranteed payment 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.

Self-employment income (loss)

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?

Self-employment income (loss)