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Jeremy and Juan Are Equal Partners in the JJ Partnership

question 72

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Jeremy and Juan are equal partners in the JJ Partnership.Jeremy receives a guaranteed payment of $120,000.In addition to the guaranteed payment,Jeremy withdraws $30,000 from the partnership.The partnership has $78,000 in ordinary income during the year.
a.How much income must Jeremy report from JJ partnership?
b.What is the effect on Jeremy's partnership basis?


Definitions:

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal, representing the expected cash inflow from the sale of inventory.

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