Molly Is a 30% Partner in the MAP Partnership

question 150

Multiple Choice

Molly is a 30% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $200,000 before any permitted deduction for guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $20,000 to Molly and made guaranteed payments to partners Molly, Amber, and Pat of $20,000 each ($60,000 total guaranteed payments) . How much will Molly's adjusted gross income increase as a result of these items?

• A) $36,000
• B) $42,000
• C) $60,000
• D) $62,000
• E) $80,000

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Definitions:

Total Revenue

The overall income generated by a business from its sales or services before any costs or expenses are subtracted.

Total Cost

The sum of fixed and variable costs incurred by a firm in producing and selling a product.

Profitable Level

The point at which a company's revenues exceed its costs, leading to financial gain or profit.

Minimal Losses

The smallest amount of losses that can be incurred, typically used in the context of minimizing financial or operational losses.