Performs service for the partnership worth 100000 but

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Intermediate Accounting: Reporting and Analysis
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Chapter 9 / Exercise M9-9
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
performs service for the partnership worth $100,000, but only takes a guaranteed payment of $40,000 in return. D performs no services for the partnership, and any distribution in liquidation or withdrawal is based on capital account balances. How muchshould D’s distributive share of partnership income be?
8.4:When is capital a material income-producing factor under Code Sec. 704(e)?
8.5:Partner D was given (by his mother) his 20% interest in a business in which capital isnota material income-producing factor, resulting in a partnership in which D and his mother are the only partners. The partnership agreement states that D will get a distributive share of 20% of the partnership income, but his mother has capital of $360,000 in the partnership, and D’s capital (given to him by his mother) was $40,000. The income of the partnership before consideration of any guaranteed payment is $300,000. His mother performs services for the partnership worth $100,000, but only takes a guaranteed payment of $40,000 in return. D performs no services for the partnership, and any distribution in liquidation or withdrawal is based on capital account balances. How much should D’s distributive share of partnership income be?
9.1:What would your answer be if the contribution increased her interest to 40%?
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Intermediate Accounting: Reporting and Analysis
The document you are viewing contains questions related to this textbook.
Chapter 9 / Exercise M9-9
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
9.2:Do a partnership’s contingent liabilities and cash-method trade payables increase anypartner’s basis?

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