Thomas is a calendar-year taxpayer. He is a 23% partner in Top Partnership, whic

Question

Thomas is a calendar-year taxpayer. He is a 23% partner in Top Partnership, which uses an August 31 fiscal year-end.. Top Partnership had $175,000 of ordinary income for the year ended August 31, 2008 and $150,000 of ordinary income for the year ended August 31, 2009. Thomas withdrew $50,000 from the partnership on December 1, 2008 when he had a basis of $138,000 in the partnership. What amount should he report on his 2008 tax return as ordinary income from Top Partnership?
1)


$40,250





2)


$45,000





3)


$50,000





4)


$31,740
please show work and do not guess

Explanation / Answer

Thomas is a calendar-year taxpayer. He is a 23% partner in Top Partnership, which uses an August 31 fiscal year-end.. Top Partnership had $175,000 of ordinary income for the year ended August 31, 2008 and $150,000 of ordinary income for the year ended August 31, 2009. Thomas withdrew $50,000 from the partnership on December 1, 2008 when he had a basis of $138,000 in the partnership. What amount should he report on his 2008 tax return as ordinary income from Top Partnership? 3)$50,000

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