Stephanie is a calendar year cash basis taxpayer. she owns a 50% profit and loss interest in a cash basis partnership with a september 30 year-end. the partnership’s operating income (after deducting guaranteed payments) was $120,000 ($10,000 per month) and $144,000 ($12,000 per month), respectively, for the partnership tax years ended september 30, 2011 and 2012. the partnership paid guaranteed payments to stephanie of $2,000 and $3,000 per month during the fiscal years ended september 30, 2011 and 2012. how much will stephanie’s adjusted gross income be increased by these partnership items for her tax year ended december 31, 2011?
a. $60,000.
b. $72,000.
c.$84,000.
d. $90,000.
e. $108,000

d. 90,000

Explanation:

Amount received from partnership

                                                          2011                           2012

operating income                         60,000                         72,000

                                             (50% of 120,000)           (50% 0f 144,000)

guaranteed payments                  24,000                           36,000

                                              (2,000 × 12)                      (3,000 × 12)

    Total                                       84,000                            108,000

84,000 × 9/12 (from 1 jan 2011 - 30 sept 2011) = 63,000

108,000 × 3/12 (from 1 oct 2011 - 31 dec 2011) = 27,000

Total = 90,000 option d