Stephanie Is a Calendar Year Cash Basis Taxpayer

question 75

Multiple Choice

Stephanie is a calendar year cash basis taxpayer.She owns a 50% profit and loss interest in a cash basis partnership with a September 30 year-end.The partnership's operating income (after deducting guaranteed payments) was $120,000 ($10,000 per month) and $144,000 ($12,000 per month) ,respectively,for the partnership tax years ended September 30,2014 and 2015.The partnership paid guaranteed payments to Stephanie of $2,000 and $3,000 per month during the fiscal years ended September 30,2014 and 2015.How much will Stephanie's adjusted gross income be increased by these partnership items for her tax year ended December 31,2014?

• A)$60,000
• B)$72,000
• C)$84,000
• D)$90,000
• E)$108,000

---

Definitions:

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented on a bank statement to ensure they are consistent and accurate.

Outstanding Checks

Checks that have been written and recorded in a checking account's ledger but have not yet been cleared or deducted from the bank's balance.

NSF Check

A check that cannot be processed due to insufficient funds in the account on which it was drawn.

Bank Reconciliation

The process of matching the balances in an organization's accounting records for a cash account to the corresponding information on a bank statement.