The AB investment partnership agreement provides for equal sharing of gains or losses from the sale of securities, ordinary taxable income is to be allocated all to A (whose marginal tax rate is 15%) and tax exempt income is to be allocated 20% to A and 80% to B (whose marginal tax rate is 36%). During the year the partnership no capital gain or losses, $20,000 of taxable income from dividends on stock and $20,000 from tax exempt interest on state bonds. (A) Determine the consequences for partner A for each of the above income sources. (B) Determine how your answer in part A would differ, if at all, if the agreement provides 20 % of the ordinary taxable income in partner A is to get all of the tax exempt income and 20% addition to equal division of capital gains and losses.
The AB investment
(A) Determine the consequences for partner A for each of the above income sources.
(B) Determine how your answer in part A would differ, if at all, if the agreement provides 20 % of the ordinary taxable income in partner A is to get all of the tax exempt income and 20% addition to equal division of
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