The CAT Partnership earned ordinary income of $144,000 in 2019. The partnership has three equal partners, Carl, Allen, and Tom. Tom, who is single, uses the standard deduction, and has other income of $20,000 (not connected with the partnership) in 2019. He receives a $33,000 distribution from the partnership during the year. What is Tom's taxable income in2019?(If an input field is not used, leave the input field(s) empty. Do not select a label or enter a zero. Assume that the partnership is not eligible for the QBI deduction.) Adjusted gross income (AGI) Minus:Deductions from AGI: Tom's taxable income Choose from any list or enter any number in the input fields and then click Check Answer. All parts showing Clear AllCheck Answer ReferenceSTANDARD DEDUCTIONFiling StatusMarried individuals filing joint returns and surviving spouses$24,400Heads of households$18,350Unmarried individuals (other than surviving spouses and heads of households)$12,200Married individuals filing separate returns$12,200Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses$1,300*Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse$1,650*Taxpayer claimed as dependent on another taxpayer’s return: Greater of (1) earned income plus $350 or (2) $1,100. * These amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind. Personal and Dependency Exemptions Suspended: In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to $0 for tax years from 2018 through 2025, effectively suspending the exemptions for these years.

Partnership Corporations are not liable to pay tax on their income but the partners of the firm are…

Answered: The CAT Partnership earned ordinary…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The CAT Partnership earned ordinary income of $144,000 in 2019. The partnership has three equal partners, Carl, Allen, and Tom. Tom, who is single, uses the standard deduction, and has other income of $20,000 (not connected with the partnership) in 2019. He receives a $33,000 distribution from the partnership during the year. What is Tom's taxable income in

2019?

(If an input field is not used, leave the input field(s) empty. Do not select a label or enter a zero. Assume that the partnership is not eligible for the QBI deduction.)




Adjusted gross income (AGI)
Minus:	Deductions from AGI:


Tom's taxable income

Choose from any list or enter any number in the input fields and then click Check Answer.

All parts showing

Clear All

Check Answer

Reference

STANDARD DEDUCTION

Filing Status
Married individuals filing joint returns and surviving spouses	$24,400
Heads of households	$18,350
Unmarried individuals (other than surviving spouses and heads of households)	$12,200
Married individuals filing separate returns	$12,200
Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses	$1,300*
Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse	$1,650*
Taxpayer claimed as dependent on another taxpayer’s return: Greater of (1) earned income plus $350 or (2) $1,100.
* These amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind.

Personal and Dependency Exemptions Suspended: In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to $0 for tax years from 2018 through 2025, effectively suspending the exemptions for these years.

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.

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