under a partnership agreement Sarah is to The fair market value of property cont

Question

under a partnership agreement Sarah is to

The fair market value of property contributed by the partner Money distributed by the partnership to the partner. The partner's distributive share of the partnership's taxable income and gain. Mark for follow up Question 20 of 105. Under a partnership agreement, Sarah is to receive 25% of the partnership's income, but not less than $12,000. The partnership's net income for this year was $32,000. What amount can the partnership deduct as a guaranteed payment, a what amount of income is Sarah required to report on her individual tax return? O Partnership: $12,000. Sarah: $8,000. Partnership: $4,000. Sarah: $12,000. O Partnership: $4,000. Sarah: $20,000. O Partnership: $12,000. Sarah: $20,000. Mark for follow up

Explanation / Answer

Second option is correct.

Sarah's share, without regard to the minimum guarantee, is $8,000 (25% × $12,000). The guaranteed payment that can be deducted by the partnership is $4,000 ($12,000 - $8,000). Sarah need to report $ 12K in her return.

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