Edward Owns a 70% Interest in the Capital, Profits, and Losses

question 109

Essay

Edward owns a 70% interest in the capital, profits, and losses of the Edward and Moore Partnership. During the year, Edward purchases surplus inventory from the partnership for $5,000. On the date of the sale, the inventory has an adjusted basis to the partnership of $8,000. For the year, the partnership's ordinary income is $50,000 after including the loss on the sale of the inventory to Edward. Assuming that there are no other partnership items to be separately stated, what is Edward's distributive share of the partnership's ordinary income for the year?

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Definitions:

Neurotransmitter

Chemical substances produced in the nervous system that transmit signals across a synapse from one neuron to another.

Coordinated Function

The harmonized operation of different components or systems working together to achieve a common goal.

Dementia

A category of brain diseases that cause a long-term and often gradual decrease in the ability to think and remember, significantly impacting daily functioning.

Lewy Bodies

Abnormal aggregates of protein that develop inside nerve cells, associated with Parkinson's disease and Lewy body dementia.