Nash and Ford Are Partners Who Share Profits and Losses

question 8

Multiple Choice

Nash and Ford are partners who share profits and losses equally.For the current tax year,the partnership had book income of $70,000 which included the following deductions: What amount should be reported as ordinary income on the partnership return for the current tax year?
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• A)$75,000
• B)$85,000
• C)$130,000
• D)$135,000
• E)None of the above

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, jurisdiction, and type of tax.

Straight-Line Depreciation

A method for portioning out the cost of a hard asset over its service life in consistent yearly values.

Net Advantage to Leasing

The total financial benefit that a company receives from leasing assets rather than purchasing them, taking into account all costs and savings.