Cornell and Joe are equal partners in Jones Company. For the current year, Jones

Question

Cornell and Joe are equal partners in Jones Company. For the current year, Jones reports the following items of income and expense:
Sales revenues $500,000
Long-term capital gains 14,000
Short-term capital losses (30,000)
Trade and business expenses (200,000)
Limited partnership loss (50,000)
Taxable income $234,000

In addition to his Jones earnings, Joe has other net taxable income of $45,000. Included in the $45,000 is $10,000 in income from a passive activity. Joe's income is:

Cornell and Joe are equal partners in Jones Company. For the current year, Jones reports the following items of income and expense:
Sales revenues $500,000
Long-term capital gains 14,000
Short-term capital losses (30,000)
Trade and business expenses (200,000)
Limited partnership loss (50,000)
Taxable income $234,000

In addition to his Jones earnings, Joe has other net taxable income of $45,000. Included in the $45,000 is $10,000 in income from a passive activity. Joe's income is:

Explanation / Answer

Answer) 162,000

Note: As Cornell and Joe are equal partners in the company, so taxable income will be divided equally among them. Joe’s taxable income will be $ 117,000(234000/2) also include other net taxable income and income from a passive activity, which are $ 35,000 and $ 10000. So the total taxable income of Joe will be 162,000.

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