Question

Partnership JSE Associates has three general partners, Spencer, Jean and Elise, who share profits equally. During the year, Spencer and Elise each received $200 in guaranteed payments for services. Jean received $400 in guaranteed payments for services. In addition to guaranteed payments, the partnership's had gross receipts of $2,400, operating expenses of $1,000. Interest income was $60 and Section 179 expense was $150. Please answer the following: Show the calculation of the amount of the partnership's ordinary income, Page 1, Line 22 and Schedule K, Line 1 of the Form 1065:

Show the amount listed on the following lines of Spencer’s K-1.

Line 1:

Line 4:

Line 5:

Line 12:

Show the amount listed on each of the following lines of Jean's K-1.

Line 1:

Line 4:

Line 5:

Line 12:

Show the calculation of the amount of income on which Jean will pay self-employment tax:

Answer 1

calculation of the amount of the partnership's ordinary income
gross receipts	2400
less -operating expenses	(1000)
less- payments for services (200+200+400)	(800)
Add- Interest income	60
	660
less - section 179 expenses	(150)
income	510
this income share three partnerr in equally ratio 510/3	170

Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179), allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.

	amount listed on the following lines of Spencer’s K-1.
Line 1	Share of income	170
Line 4	guaranteed payments for services.	200
Line 5	Interest income 60/3	20
Line 12	section 179 deduction 150/3	50
	Total	440

	amount listed on the following lines of Jean's K-1.
Line 1	Share of income	170
Line 4	guaranteed payments for services.	400
Line 5	Interest income 60/3	20
Line 12	section 179 deduction 150/3	50
	Total	640

the amount of income on which Jean will pay self-employment tax: when Jeans pay taxes he take dedection on section 179 so we deduct $50 in his income so here his taxable income will be 170+400+20-50=540