In the Current Year, the POD Partnership Received Revenues of $200,000

question 21

Multiple Choice

In the current year, the POD Partnership received revenues of $200,000 and paid the following amounts: $50,000 in rent and utilities, and $20,000 as a distribution to partner Olivia.In addition, the partnership earned $6,000 of long-term capital gains during the year.Partner Donald owns a 50% interest in the partnership. How much income must Donald report for the tax year?

• A)$68,000 ordinary income.
• B)$78,000 ordinary income.
• C)$65,000 ordinary income; $3,000 of long-term capital gains.
• D)$75,000 ordinary income; $3,000 of long-term capital gains.
• E)None of the above.

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Definitions:

Ergo Propter Hoc

A logical fallacy meaning "therefore, because of this," suggesting a cause-and-effect relationship where none exists.

Fallacy

A mistaken belief, especially one based on unsound arguments or logical errors.

Fallacy Of Composition

The erroneous belief that what is true for the individual is necessarily true for the group as a whole.

Economic Relationships

Connections or associations between economic variables that show how changes in one can affect changes in another.