Final answer:
Nina's share of the ordinary partnership income from the LN partnership is $21,000, and her shares of the separately stated items include $5,000 from long-term capital gain, $1,000 from tax-exempt interest income, and -$1,000 from investment interest expense, totaling $26,000.
Step-by-step explanation:
Nina’s share of ordinary partnership income and separately stated items from the LN partnership can be calculated by first considering the ordinary business income which is derived from the revenues, less the cost of goods sold (COGS), salaries to employees, and business interest expenses. The tax-exempt interest income and long-term capital gain are separately stated items and do not form part of the ordinary business income.
To calculate the partnership's ordinary business income:
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- Revenues: $300,000
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- COGS: -$160,000
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- Salaries to employees: -$80,000
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- Business interest expense: -$18,000
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- Ordinary business income: $42,000
Since the investment interest expense and long-term capital gain are separately stated, they are not subtracted from the ordinary business income but are allocated separately to the partners. Tax-exempt interest income, due to its nature, is also separately stated and not included in the ordinary business income calculation.
Nina, as a 50% partner, would have the following shares:
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- 50% of ordinary business income: $21,000
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- 50% of long-term capital gain: $5,000
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- 50% of tax-exempt interest income: $1,000
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- 50% of investment interest expense: -$1,000
To calculate Nina's total share, we sum her portion of the ordinary business income and separately stated items: $21,000 (ordinary income) + $5,000 (capital gain) + $1,000 (tax-exempt interest) - $1,000 (investment interest expense) = $26,000 total.