R3 M6 - Partnership Flashcards
1
Q
What is ordinary business income?
A
- Sales Revenue
- Cost of goods Sold
- Wages (Salaries to employees)
- Guaranteed Payments
- Depreciation
-MACRS Depreciation - - Bonus
2
Q
What are separately stated items?
A
Items that are:
- Subject to different tax rates looking at it from an individual level.
- Reported on different forms like Sch A (Itemized Deduction)
- Guaranteed payments, interest/ Dividend income (Sch B.)
Dividend Income
Capital gain
Charitable contributions
Section 179 expense
3
Q
How do you calculate ordinary business income in this problem?
A
How do you calculate MACRS depreciation would be zero because it an ordinary business expense which was used to calculate the ordinary business income.
