Meg and Abby Are Equal Partners in the AM Partnership

question 32

Multiple Choice

Meg and Abby are equal partners in the AM Partnership, which earns $40,000 ordinary income, $6,000 long-term capital gain (LTCG) , and $2,000 Sec. 1231 loss during the current year. What is the amount and character of income that must be reported on Abby's tax return for this year's partnership operations?

• A)$20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss
• B)$19,000 ordinary income, $3,000 LTCG
• C)$23,000 ordinary income, $1,000 Sec. 1231 loss
• D)$22,000 ordinary income

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