Rhonda Has a 30% Interest in the Capital and Profits

question 111

True/False

Rhonda has a 30% interest in the capital and profits of the ABC Partnership. In the first year of the partnership, 2018, it earned $150,000. However, the partners agreed that nothing would be distributed until after the end of March 2019, before Rhonda filed her 2018 tax return. The distributions were to be delayed because it was unclear as to whether business conditions would remain good in 2019. Things were going well in 2019 and therefore the partnership distributed $30,000 to Rhonda at the end of March, as a portion of her share of the partnership's 2018 earnings. The partnership's income for 2019 was $60,000. As a result, Rhonda must recognize $30,000 of gross income in 2018 and $18,000 in 2019.

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Definitions:

Governmental Interference

Actions by a government that affect the activities of individuals or organizations, often seen as negative or intrusive.

Liberty

Liberty refers to the state of being free within society from oppressive restrictions imposed by authority on one's way of life, behavior, or political views.

Legalized Abortion

The legal provision that allows for the termination of a pregnancy under certain conditions, varying widely by jurisdiction.

Liberals

Individuals or groups advocating for policies that emphasize the need for the government to solve problems, especially those related to social inequality, civil rights, and social justice.