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This year, Reggie's distributive share from Almonte Partnership includes $8,000 of interest income, $4,000 of dividend income, and $60,000 ordinary business income.
A. Assume that Reggie materially participates in the partnership. How much of his distributive share from Almonte Partnership is potentially subject to the Medicare contribution tax?
A. If Reggie materially participates in the business, the ordinary income is not passive to him and should not be subject to the Medicare contribution tax. The $8,000 of interest income and the $4,000 of dividend income are potentially subject to the Medicare contribution tax.
B. Assume that Reggie does not materially participate in the partnership. How much of his distributive share from Almonte Partnership is potentially subject to the Medicare contribution tax?
B. If Reggie is not a material participant in the partnership the $8,000 of interest income, the $4,000 of dividend income, and the $60,000 of ordinary business income are potentially subject to the Medicare contribution tax.
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