Rowan and Sanjay Are Equal Partners in a Partnership, Which

question 2165

Multiple Choice

Rowan and Sanjay are equal partners in a partnership, which uses the calendar year as its tax year. On September 1, this year, Hailley contributed $60,000 cash for a one- third interest in the partnership. The partnership reports $72,000 of ordinary income for the tax year ending on December 31 of this year. The income allocation to Hailley is (assume the elective proration method with a monthly convention)

• A) $24,000.
• B) $12,000.
• C) $8,000.
• D) $0.

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Definitions:

Internal Locus of Control

Internal Locus of Control is a psychological concept referring to individuals who believe they can control their life, attributing success to their own efforts and abilities rather than external factors.

Decremental

Characterized by a gradual decrease in size, strength, or value over time.

Incidental

Occurring alongside or as a minor accompaniment to something else, not central or primary.

Need for Achievement

A psychological drive that fosters the pursuit of accomplishing difficult tasks and meeting high standards of success.