Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of partnership items: Ordinary income: $25,000 Section 1231 loss: (3,000) Nondeductible expense: 1,000 Cash distribution: 5,000 Required: a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction. b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of partnership items: Ordinary income: $25,000 Section 1231 loss: (3,000) Nondeductible expense: 1,000 Cash distribution: 5,000 Required: a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction. b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Rochelle is a limited partner in Megawatt Partnership . For 2021, her schedule K-1 from the partnership reported the following share of partnership items:
Ordinary income: $25,000
Section 1231 loss: (3,000)
Nondeductible expense: 1,000
Cash distribution: 5,000
Required:
a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction.
b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Transcribed Image Text:Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of
partnership items:
Ordinary income
Section 1231 loss
Nondeductible expense
$ 25,000
(3,000)
1,000
5,000
Cash distribution
Required:
a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI
deduction.
b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the
QBI deduction.
Net impact on taxable income
< Required A
Required B
>
Transcribed Image Text:Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of
partnership items:
Ordinary income
Section 1231 loss
$ 25,000
Nondeductible expense
Cash distribution
(3,000)
1,000
5,000
Required:
a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI
deduction.
b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in
Megawatt. (Cash outflows should be indicated by a minus sign.)
After-tax cash flow
< Required A
Required B >
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