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Meg and Abby are equal partners in the AM​ Partnership, which earns​ $40,000 ordinary​ income, $6,000 longminusterm capital gain​ (LTCG), and​ $2,000 Sec. 1231 loss during the current year. What is the amount and character of income that must be reported on​ Abby's tax return for this​ year's partnership​ operations?

User Umbreen
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Answer:

$20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss

Step-by-step explanation:

Since Meg and Abby are equal partners in the AM​ Partnership, which earns​ $40,000 ordinary​ income, $6,000 longminusterm capital gain​ (LTCG), and​ $2,000 Sec. 1231 loss during the current year. As an equal partner, Abby receives a 50% share of all the income/loss items from the two partner partnership. The answer is $20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss

User Redoc
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