Phil and Bill Each Own a 50 Percent Interest in P&B

question 21

Multiple Choice

Phil and Bill each own a 50 percent interest in P&B Interests. P&B Interests has ordinary income for the year of $35,000 before guaranteed payments to Phil. If Phil receives guaranteed payments of $20,000 during the tax year, what is the total income or loss that should be reported by Bill from the partnership for this tax year?

• A)$5,000 income
• B)$7,500 income
• C)$25,000 income
• D)$30,000 income
• E)None of these

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