JBean and D ACalculate the Net Ordinary Income

question 82

Essay

J.Bean and D.Counter formed a partnership.During the current year, the partnership had the following income and expenses:​




$\begin{array}{llcc} \text {Gross income from operations } &\$135,000 \\ \text {Gain on sale of antique abacus (a business asset) } &4,000\\ \text { Interest income from business bank account } &100\\\\ \text { Deductions: } &\$65,000\\ \text {Sal aries to employees } &5,000\\ \text {Payroll taxes } &8,000\\ \text { Rent } &3,500\\ \text {Depreciation } &2,000\\ \text {Contribution to United Way charity } &3,000\\ \text { Foreign tax paid on overseas business deals } &\\\\ \text { Distributions to the partners} &\$40,000\\\end{array}$


a.Calculate the net ordinary income.
b.List all of the other items that need to be separately reported.
c.If the partnership is on a calendar year tax basis, when is the partnership tax return due?

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Definitions:

Price Ceiling

A legal maximum price that can be charged for a good or service, above which it cannot rise.

Price Floors

Minimum price levels set by the government for certain goods and services, below which they cannot be sold.

Price Ceilings

A government-imposed limit on how high a price can be charged for a product or service.

Quantity Traded

The total number of units of goods or services exchanged in a market during a given period.