1) Sue is a 50% partner in a coffee kiosk. Per the partnership agreement, Sue re
ID: 2432323 • Letter: 1
Question
1) Sue is a 50% partner in a coffee kiosk. Per the partnership agreement, Sue received a guaranteed payment for this year of $20,000 for the work that she did running the coffee shop. The ordinary income for the partnership on Schedule K, line 1 is $86,400. On Sue's partnership Schedule K-1, what amount should be included in box 14?
A- $20,000
B- $43,200
C- $53,200
D- $63,200
1) Sue is a 50% partner in a coffee kiosk. Per the partnership agreement, Sue received a guaranteed payment for this year of $20,000 for the work that she did running the coffee shop. The ordinary income for the partnership on Schedule K, line 1 is $86,400. On Sue's partnership Schedule K-1, what amount should be included in box 14?
A- $20,000
B- $43,200
C- $53,200
D- $63,200
2) Sue is a 50% partner in a coffee kiosk. According to the partnership agreement, Sue will receive a guaranteed payment each year of $20,000 for the work that she does running the coffee shop. The guaranteed payment will be reported on: A- Schedule K, line 4; and Schedule K-1, box 4 only. B- Form 1065, page 1, line 10. C- Form 1065, page 1, line 10; Schedule K, line 4; and Schedule K-1, box 4. D- Form 1065, page 1, line 10; and Schedule K-1, box 4.Explanation / Answer
On box 14, income subject to self-employment tax is included.
Income subject to self-employment tax is:
Share of ordinary income = 86400/2 = 43,200
Guaranteed payments = 20000
Total = 63,200
Thus, correct option is option - D
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