Question

Wayne owns a 30% interest in the capital and profits of Emerald Company (a calendar year partnership). For tax year 2020, the partnership earned revenue of $900,000 and had operating expenses of $660,000. During the year, Wayne withdrew from the partnership a total of $90,000. He also invested an additional $30,000 in the partnership. For 2020, Wayne's gross income from the partnership is: a.$162,000. b.$72,000. c.$132,000. d.$90,000.

Answer 1

$72,000

Step-by-step explanation:

Calculation to determine what Wayne's gross income from the partnership is:

Using this formula

Gross income=Interest in the capital×(Partnership earned revenue -Operating expenses )

Let Plug in the formula

Gross income=30% ×($900,000 – $660,000)

Gross income = $72,000

Therefore Wayne's gross income from the partnership is:$72,000