Which of the following cannot be characterized as a guaranteed payment to a partner?A specified minimum 4% return on investment for a $1 million contribution by a partnerA specified 5% profit allocation on computed partnership profitsA minimum required annual distribution of $100,000 to a partner for regular services to the partnershipnone of the above At January 1, 2021, Jody's basis in her partnership interest was $20,000. Her share of partnership items for the year is as follows: aguaranteed payment of $70,000, a long-term capital gain of $5,000, and an ordinary partnership loss of $20,000. She received adistribution from the partnership of $15,000 during the year. Assuming she materially participates in the partnership, which item setbelow would she report on her personal US income tax return for 2021?Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $20,000, and a guaranteed payment of$70,000.Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $10,000, a guaranteed payment of$70,000, and has a suspended loss of $10,000Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $0, a guaranteed payment of $70,000,and has a suspended loss of $20,000.none of the above

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Which of the following cannot be characterized as a guaranteed payment to a partner? A specified minimum 4% return on investment for a $1 million contribution by a partner A specified 5% profit allocation on computed partnership profits A minimum required annual distribution of $100,000 to a partner for regular services to the partnership none of the above

Which of the following cannot be characterized as a guaranteed payment to a partner? A specified minimum 4% return on investment for a $1 million contribution by a partner A specified 5% profit allocation on computed partnership profits A minimum required annual distribution of $100,000 to a partner for regular services to the partnership none of the above

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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Concept explainers

Partnership Accounting

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

Partner Admission and Withdrawal

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.

Question

Which of the following cannot be characterized as a guaranteed payment to a partner?
A specified minimum 4% return on investment for a $1 million contribution by a partner
A specified 5% profit allocation on computed partnership profits
A minimum required annual distribution of $100,000 to a partner for regular services to the partnership
none of the above

At January 1, 2021, Jody's basis in her partnership interest was $20,000. Her share of partnership items for the year is as follows: a
guaranteed payment of $70,000, a long-term capital gain of $5,000, and an ordinary partnership loss of $20,000. She received a
distribution from the partnership of $15,000 during the year. Assuming she materially participates in the partnership, which item set
below would she report on her personal US income tax return for 2021?
Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $20,000, and a guaranteed payment of
$70,000.
Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $10,000, a guaranteed payment of
$70,000, and has a suspended loss of $10,000
Long-term capital gain of $5,000, a nontaxable distribution of $15,000, an ordinary loss of $0, a guaranteed payment of $70,000,
and has a suspended loss of $20,000.
none of the above

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