Matt and Joel Are Equal Partners in the MJ Partnership

question 110

Multiple Choice

Matt and Joel are equal partners in the MJ Partnership. For the current year ended December 31, the partnership has book income of $80,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Matt, $35,000; and Joel, $25,000; and (2) charitable contributions, $6,000. The book income amount does not include any sales of capital assets or Sec. 1231 assets or any tax-exempt income. Based on the above information, what amount should be reported as ordinary income on the partnership return?

• A)$60,000
• B)$80,000
• C)$86,000
• D)$140,000

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Definitions:

Discrimination

Discriminatory acts against various categories of individuals, mostly due to their racial, age, gender, or disability status.

Head Tax

A fixed fee charged as per capita tax on every individual, historically used as a form of immigration restriction.

Chinese Immigrants

Individuals from China who move to another country, with the intention of living there permanently or for an extended period.

Racial Stereotyping

The oversimplified and generalized beliefs about individuals based solely on their racial identity, often leading to prejudices and discrimination.