Elena Owns 25% of a Partnership That Reported Net Income

question 21

Multiple Choice

Elena owns 25% of a partnership that reported net income of $100,000 for the year.Elena's basis in her partnership interest is $20,000 at the beginning of the year.During the year $5,000 was distributed to Elena from the partnership.Assuming Elena's QBI deduction is not limited, how much in the net amount Elena is taxed on this year as a result of her interest in this partnership?

• A)$24,000
• B)$20,000
• C)$4,000
• D)$0

---

Definitions:

Test Marketing

The process of launching a new product or service to a limited geographical area to gauge its viability before a full-scale launch.

Maturity Stage

A phase in the product life cycle where sales growth slows down, and the product is well established in the market.

Growth Stage

A phase in the product life cycle characterized by rapid market acceptance and increasing profits.

Introductory Stage

The introductory stage is the initial phase of a product lifecycle, characterized by product launch, market entry, and initial promotion efforts.