Matt and Joel Are Equal Partners in the MJ Partnership

question 110

Multiple Choice

Matt and Joel are equal partners in the MJ Partnership. For the current year ended December 31, the partnership has book income of $80,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Matt, $35,000; and Joel, $25,000; and (2) charitable contributions, $6,000. The book income amount does not include any sales of capital assets or Sec. 1231 assets or any tax-exempt income. Based on the above information, what amount should be reported as ordinary income on the partnership return?

• A)$60,000
• B)$80,000
• C)$86,000
• D)$140,000

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Definitions:

Equitable Treatment

The practice of fairness and impartiality in the handling and decision-making of all individuals.

Designated Groups

Populations identified for special attention or treatment in policies or programs, often to address historical disadvantages or inequalities.

Educational Qualifications

Certificates, degrees, or diplomas obtained from educational institutions which demonstrate a person's level of education or expertise in specific areas.

Unemployment Rates

The proportion of the workforce that is unemployed and actively looking for work.