On January 2 of the Current Year, Calloway and Taylor

question 44

Multiple Choice

On January 2 of the current year, Calloway and Taylor contribute cash equally to form the CT Partnership. Calloway and Taylor share profits and losses in a ratio of 75% and 25%, respectively. The partnership's ordinary income for the year was $40,000. Calloway received a distribution of $5,000 during the year. What is Calloway's share of taxable income for the year?

• A)$5,000
• B)$10,000
• C)$20,000
• D)$30,000

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Definitions:

Monetary Assets

Assets that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Foreign Currency Transactions

Financial transactions involving the exchange of one country's currency for another's, impacting businesses and investors who operate internationally.

Exchange Rate

The price at which one currency can be exchanged for another.

Noncontrolling Shareholders

Shareholders who own a minority of a company's shares and thus have limited influence on corporate decisions.