Question

Harold has a 50% interest in a general partnership that has a $14,000 loss for the year. He materially participates in the partnership, his basis in the partnership is $10,000 at the beginning of the year. He also has salary from other employment of $46,200. If he is single and claims the standard deduction, what are his taxable income and tax liability, respectively, in 2019

Answer 1

Taxable income $27,000

Taxable liability = $3,046

Step-by-step explanation:

Given:

Partnership ratio = 50%

Loss during the year = $14,000

Salary = $46,200

Find:

Taxable income and liability

Computation:

Taxable income

Salary = $46,200

Less Loss (14,000)(50%) $7,000

Less standard deduction $12,200

Taxable income $27,000

Taxable liability = $970 + (27,000 - 9,700)12%

Taxable liability = $3,046