Question

Required information The following information applies to the questions displayed below.) The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $17,400, 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: Sales revenue Gain on sale of land ($1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 90, 200 $ 7,300 $(46,780) $(14,500) $(20, eee) $ (5,680) $ 4,500 $ (3,780) (Negative amounts should be indicated by a minus sign.)

Answer 1

Solution Gav's Oxinary business income llloss), Se pevateiy Stated itenms, and sele - employment income aye Calculates in the table below's Descviption Tobal Amount Ahocaled Explanalien $90200 Sailes Revenue Less 461700) 41500 Cost uGoads sola bepyeciation- MACRS Employee wages OEhev Expense $1u00 Guarantees ayments Ovainavs Business lass (i2,100 54us u51. toGo Seperatčly State Thems on schesuie k-1 45 k, ko Guaru Section 231 Jains $T,300 $3/225 Cosh choxitable (5,600) 5 20) usI ko Gravu contributi ons AITUO0 Tokal paymen Guarentzs Guayanteel payments 45t: to Gar 2,625 hiS00 Munical bona Tntevesk Self employment 5,300 1,955 Income Suaventee pasment Suaventre -5,5 pasment Cary's -2.1o0 allocatel ovalrnons OYna buciness Loss business LOSS

Self- emplogment IncomecllLoss : 11,400 Explanations If Grary Is a limikes Parknev, then his Sele emploment income wouid be edual the $1700 quaventeed pagment he yeceives Self- employment income{lloss Exxplanabion' Under pyopOsed Reg, &1.1402 (a) -2 , Grar:'s $S.uus Shave of ovainary business loss wi11 teduce his S T,uod guaventeed pa ment leaving him oith & 1,155 d self- employment inCome because he gpent move than 5oo hours isorked he bvade o businesS the LL. Th this 'nstance, the pyoposed yegulabions pYovise GaY with a fauauyable intoypvetation & the law.

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