Matilda is a limited partner in Partnership JKL, and she does not materially participate in the business. Choose the response that correctly completes the last sentence about her ability to claim the qualified business income deduction. If she is eligible for the deduction, select the response that describes how the amount of her deduction is computed. If she is not eligible, select the response that correctly explains the reason why she cannot claim the deduction.Matilda is: (a) Eligible for the deduction, and the exact amount she is eligible to deduct is computed on the partnership's tax return and reported to her on Schedule K-1 (Form 1065).(b) Eligible for the deduction, but she must figure the exact amount she is eligible to deduct based on information the partnership provides on her Schedule K-1 (Form 1065).(c) Not eligible for the deduction because she is not a general partner.(d) Not eligible for the deduction because she does not materially participate in the business.

Where a partnership itself is generally not subject to income tax, individual partners (including…

Answered: Matilda is a limited partner in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Matilda is a limited partner in Partnership JKL, and she does not materially participate in the business. Choose the response that correctly completes the last sentence about her ability to claim the qualified business income deduction. If she is eligible for the deduction, select the response that describes how the amount of her deduction is computed. If she is not eligible, select the response that correctly explains the reason why she cannot claim the deduction.

Matilda is:

(a) Eligible for the deduction, and the exact amount she is eligible to deduct is computed on the partnership's tax return and reported to her on Schedule K-1 (Form 1065).
(b) Eligible for the deduction, but she must figure the exact amount she is eligible to deduct based on information the partnership provides on her Schedule K-1 (Form 1065).
(c) Not eligible for the deduction because she is not a general partner.
(d) Not eligible for the deduction because she does not materially participate in the business.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

What is the correct ansawer a, b, c or d?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions