Nicholas, a 40% Partner in Nedeau Partnership, Gives One-Half of His

question 33

Multiple Choice

Nicholas, a 40% partner in Nedeau Partnership, gives one-half of his interest to his sister, Michelle. During the current year, Nicholas performs services for the partnership for which reasonable compensation is $80,000, but for which he accepts no pay. Nicholas and Michelle are each credited with a $100,000 distributive share, all of which is ordinary income. What are Nicholas' and Michelle's distributive share?

---

Definitions:

Opportunity Cost

Declining the opportunity for potential benefits from a range of alternatives upon selecting one.

Cell Phones

Portable telecommunication devices that allow users to make voice calls and access various digital services over cellular networks.

Herring

A type of fish that is widely consumed globally, known for its silver color and presence in various cuisines.

Opportunity Cost

The cost associated with the best foregone choice because of a decision.