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cwang1026
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| Posted: 24 Aug 2011 at 14:49 | IP Logged
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if a partnership has a fiscal tax year, but the partner in the partnership has calendar year, how is the net income or loss calculated?
for example:
Joe Smith is a calendar year taxpayer and is a partner in XYZ co, which has a fiscal year end of June 30. Joe received a guaranteed pmt of $100,000 from the partnership. XYZ Co. has $400,000 net income from 7/1/10 to 6/30/11 and $200,000 from 7/1/11 to 6/30/12. How would these 2 events be recorded in Joe's 2011 income tax return?
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nambivar
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| Posted: 24 Aug 2011 at 18:36 | IP Logged
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In his 2011 return, Joe will declare the gteed payment
received during calendar year 2011 plus the share of income
from the partnership for its year ended 6/30/2011.
In his 2012 return, Joe will declare the gteed payments
received during the calendar year 2012 plus the share of
his income from the partnership, for its year ended
6/30/2012.
There is a good mcq on this in Wiley 2011 REG in module 36.
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cwang1026
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| Posted: 24 Aug 2011 at 19:26 | IP Logged
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thank you nambivar!
i remember seeing a similar question in wiley, but couldn't find it. do you know which problem number in module 36?
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cwang1026
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| Posted: 25 Aug 2011 at 16:03 | IP Logged
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can anyone help with this question?
A partnership owned by Joe Meeker and Taylor Corporation has a fiscal year ending 3/31. Meeker files his tax return on a calendar year basis. The partnership paid Meeker a guarneteed salary of $500/month during calendar year 2008 and $750 a month during the calendar year 2009. After deducting this salary, the parntership realized ordinary income of $40,000 for the year ended 3/31/09, and $60,000 for the year ended 3/31/2010. Meeker's share of the profits is the salary paid to him plus 30% of the partnership profits after deducting this salary. For 2009 Meeker should report taxable income of:
A.) $22,500
b.) 20,250
C.) 21,000
D.) 18,750
I ended up getting $25,500 which is not one of the choices.
Guarenteed in 2009 = $750*12= $9,000
Share of profits in 2009= (.25*40,000) + (.75*60000) = $55,000*.30= $16,500
Total taxable income= $25,500.
Where did i go wrong?
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cwang1026
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| Posted: 25 Aug 2011 at 16:07 | IP Logged
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the answer is $18,750 btw
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Topic: partnership tax year vs. individual
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