Question

The B & W Partnership earned taxable income of $140,000 for the year. Bryan is entitled to 50% of the profits, but Bryan withdrew only $60,000 during the year. What is Bryan's gross income from the partnership for the year?

1) $60,000
2) $70,000
3) $80,000
4) $90,000

Answer 1

Bryan's gross income from the partnership for the year is the entitled share of the profits, which is 50% of $140,000. Therefore, his gross income is $70,000, even though he withdrew only $60,000.

Step-by-step explanation:

The question is asking to determine Bryan's gross income from the partnership for the year. Given that the B & W Partnership earned taxable income of $140,000 for the year and Bryan is entitled to 50% of the profits, we calculate Bryan's share as follows:

50% of $140,000 = 0.50 × $140,000 = $70,000.

Therefore, regardless of the amount Bryan withdrew during the year, his gross income from the partnership is based on his entitled share of the profits, which is $70,000.

To determine Bryan's gross income from the partnership for the year, we need to calculate 50% of the partnership's taxable income, which is $140,000. Therefore, Bryan's gross income from the partnership is $70,000 (50% of $140,000).

Answer 2

Bryan's gross income from the partnership is directly related to his share of the profits, which is 50% of the total income of $140,000, making his gross income $70,000, regardless of the amount he actually withdrew during the year.

Step-by-step explanation:

The student's question pertains to the distribution of profits from a partnership and how it is reflected as gross income for an individual partner. If the B & W Partnership earned taxable income of $140,000 for the year, and Bryan is entitled to 50% of the profits, his share would be 50% of $140,000, which equals $70,000. The amount that Bryan withdrew during the year ($60,000) does not affect his gross income from the partnership. Therefore, the correct answer is that Bryan's gross income from the partnership for the year is $70,000.

The B & W Partnership earned a taxable income of $140,000 for the year. Bryan is entitled to 50% of the profits but only withdrew $60,000 during the year. To determine Bryan's gross income from the partnership, we need to calculate his share of the profits and subtract any withdrawals he made.

Bryan's share of the profits is 50% of $140,000, which equals $70,000. Since he withdrew $60,000 during the year, his gross income from the partnership for the year is $70,000.