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The SJ Partnership, in which Sandy and Jack are equal partners, reported the following income and losses in the current year: How do the partners
The SJ Partnership, in which Sandy and Jack are equal partners, reported the following income and losses in the current year: How do the partners treat these items? (Select all that apply.) These particular items cannot be separately stated as pass-through items. The partnership is required to file a separate return including these items and pay the associated tax on the income. Sandy and Jack will each include one-half the $125,000 profit from operations, one-half the interest from the corporate bonds, one-half the $20,000 long-term capital gains, and one-half of the municipal bond interest in his or her gross income. Sandy and Jack will each include one-half the $125,000 profit from operations, one-half the interest from the corporate bonds, and one-half the $20,000 long-term capital gains in his or her gross income. The municipal bond interest is exempt from taxation and will not be reported by either partner. As separately stated pass-through items. The partnership is not a taxable entity
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