Nicholas, a 40% Partner in Nedeau Partnership, Gives One-Half of His

question 85

Multiple Choice

Nicholas, a 40% partner in Nedeau Partnership, gives one-half of his interest to his sister, Michelle. During the current year, Nicholas performs services for the partnership for which reasonable compensation is $80,000, but for which he accepts no pay. Nicholas and Michelle are each credited with a $100,000 distributive share, all of which is ordinary income. What are Nicholas' and Michelle's distributive share?

---

Definitions:

Mandible

The lower jawbone, which is the largest and strongest bone of the face, involved in chewing movements.

Temporal

Related to the temples of the head or to time.

Maxilla

is a pair of bones forming the upper jaw and part of the orbits of the eyes, holding the upper teeth.

Styloid Process

A slender pointed piece of bone just below the ear, serving as an anchor point for muscles associated with the tongue and larynx.