ABC Co and XYZ Co

question 8

Multiple Choice

ABC Co. and XYZ Co. have entered into a partnership for business purposes. Both companies are CCPCs and they share the profits and losses of the business equally. During the year, the partnership earned $200,000 of active business income, and ABC Co. earned $450,000 in business income from operations other than the partnership. All of the companies have a December 31st year-end. How much of ABC Co.'s share of the partnership profits will be eligible for the small business deduction?

• A)$0
• B)$50,000
• C)$200,000
• D)$100,000

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