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Compute each partner?s gross income from the partnership for the tax year.

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Faye, Gary, and Heidi each have a one-third interest in the capital and profits of the FGH Partnership. Each partner had a capital account of $50,000 at the beginning of the tax year. The partnership profits for the tax year were $270,000. Changes in their capital accounts during the tax year were as follows;??Beginning balance Withdrawals Additional;contributions Allocation of profits Ending balance;Faye;$ 50,000 (20,000);?0? 90,000 $120,000;Gary;$ 50,000 (35,000);?0? 90,000 $105,000;Heidi;$ 50,000 (10,000);5,000 90,000 $135,000;Total;$150,000 (65,000);5,000 270,000 $360,000;?????????????Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.;In arriving at the $270,000 of partnership profits, the partnership deducted $2,400 ($800 for each partner) in premiums paid for group term life insurance on the partners. Faye and Gary are 39 years old, and Heidi is 35 years old. Other employees are also eligi- ble for group term life insurance equal to their annual salary. These premiums of $10,000 have been deducted in calculating the partnership profits of $270,000. Compute each partner?s gross income from the partnership for the tax year.

 

Paper#23662 | Written in 18-Jul-2015

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