Question

wesley is a general partner in lambda partnership. his schedule k-1 this year reflects $35,000 share of ordinary income and $50,000 guaranteed payment. what amount of wesley's partnership earnings is subject to self-employment tax?multiple choice question.$50,000$0$85,000$35,000

Answer 1

The total amount of Wesley's partnership earnings subject to self-employment tax is $85,000, which includes both his share of ordinary income and guaranteed payment.

Step-by-step explanation:

The amount of Wesley's partnership earnings that is subject to self-employment tax would include both his share of ordinary income, and the guaranteed payment he receives. In the scenario where Wesley's Schedule K-1 reflects a $35,000 share of ordinary income and a $50,000 guaranteed payment, the total amount subject to self-employment tax is $85,000. This is because guaranteed payments are considered earnings on which self-employment taxes must be paid, as well as his distributive share of the partnership's income.