Iris and Jeong File a Joint Return

question 98

Essay

Iris and Jeong file a joint return.Iris is an executive with a corporation,earning a $800,000 salary.Jeong is a 50% partner in JK Partnership.He works full-time in the partnership.Jeong's basis in his partnership interest at the beginning of the year is $1 million.In the current year,the partnership reports an ordinary loss of $1.2 million,half of which is allocated to Jeong.There were no separately stated items,no distributions made and no changes in liabilities.Iris and Jeong earned $100,000 of dividend income from their investment portfolio.They do not itemize deductions.
a.Determine 2019 taxable income for Iris and Jeong.
b.Discuss the treatment of any income or loss items not recognized in 2019.

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Definitions:

Action Potentials

Electrical impulses in neurons or muscle cells that occur when the membrane potential of a cell rapidly rises and falls.

Receptor Potentials

The electrical potential changes occurring in sensory neurons’ receptors in response to stimulating agents, leading to the generation of action potentials.

Sensory Adaptation

The condition in which the response to a stimulus is reduced even though the stimulus continues at the same intensity.

Membranous Labyrinth

A complex system of fluid-filled tubes and sacs found within the inner ear, crucial for balance and hearing.