Question

Cynthia is a calendar year individual who is an active partner in the fiscal partnership. The Partnership has a tax year ending 4/30. Cynthia's share of the Line (1) Ordinary Business Income is $24,000 for the partnership's first year ending 4/30/21. Each month beginning with 5/1/20 the partnership made a $1,000 distribution to Cynthia (other partners got similar distributions).

1. For her 2021, tax return how much income would Cynthia report from the partnership?

2. Cynthia also receives a guaranteed payment of $15,000. How much if any income must Cynthia report from the partnership on her Form-1040 2021 tax return?

3. If Cynthia's share of Line (1) income was a loss of (5,000) and she received a guaranteed payment of $8,000, how much self-employment income would Cynthia report for the year?

Answer 1

1)

Income from partnership - 24000$ ( Equal to income share from partnership )

 

2)

Yes - It is taxable income

 

The total income will be 24000$ + 15000$ = 39,000$

 

3)

The self employment income will be

Loss of share from partnership = (5000)$

Guaranteed payment - 8000$

Net income = 3000$ (8000$-5000$)