source: INCOME TAXATION by Win Ballada, page 217. 2021 issue...

source: INCOME TAXATION by Win Ballada, page 217. 2021 issue

Taxation of Partnership and partners

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NAME: SCORE: SECTION: PROFESSOR: Comprehensive Problem For the taxable year 2019, Gally and Nilo, both married, are partners of a general professional partnership who agreed to divide profits and losses 60:40, respectively. The following are the details of the accounts: Sale of Services, GPP Cost of Services, GPP P2,450,000 Itemized Deductions, GPP 720,000 580,000 Partner Gally Partner Nilo Travelling Expenses (not liquidated by the GPP) P 45,000 P 35,000 Representation Expenses (personal credit card of Partner used) 52,500 63,000 Cost of Car, to be depreciated over 5 yrs. (used in the practice, 850,000 900,000 registered under the Partner) Interest on Bank Deposits 5,000 16,000 Salaries from the GPP 240,000 180,000 Book Royalties 160,000 Gross Receipts from Business (not the GPP); 450,000 Cost of Sales-Business 230,000 Itemized Deductions-Business 145,000 Required: Compute in good form the distributable net income of the GPP, share of each partner and taxable income assuming that the GPP used: (1) itemized deductions; (2) optional standard deduction.

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