The XYZ Partnership Reports the Following Operating Results for the Current

question 34

Multiple Choice

The XYZ Partnership reports the following operating results for the current year: $$\begin{array} { | l | r | } \hline \text { Net long-term capital loss } & ( \$ 40,000 ) \\\hline \text { Net Sec. 1231 loss } & ( 16,000 ) \\\hline \text { Ordinary income } & 50,000 \\\hline\end{array}$$ Tai has a 20% profits interest and a 25% loss interest in the XYZ Partnership.His distributive share of ordinary income is

• A)$6,800.
• B)$8,500.
• C)$10,000.
• D)$12,500.

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Definitions:

Secretly Competes

When an individual or entity engages in competition against another party without their knowledge, often violating a trust or agreement.

Business Transaction

The process of buying, selling, or exchanging goods, services, or any kind of financial relation between businesses or between a business and a consumer.

Breached Fiduciary Duty

A violation of the obligation to act in the best interest of another party, often related to situations of trust and confidence.

Profit Made

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes.