split profits and losses according to a 40/60 ratio. Additionally, the partnership will provide Jonah with a $15,000 guaranteed payment for services he provides to the partnership. Ashanti Partnership reports the following revenues, expenses, gains, losses, and distributions for its current taxable year: Gain on Sale of Land* $ 4,000 MACRS Depreciation $ 7,500 Charitable Contributions $ 12,500 Sales $ 40,000 Interest Income $ 500 Cost of Goods Sold $ 32,000 Section 179 Expense $ 7,000 Tax-Exempt Income $ 2,000 Other Income $ 5,000
Ashanti
| Gain on Sale of Land* | $ 4,000 |
|---|---|
| MACRS |
$ 7,500 |
| Charitable Contributions | $ 12,500 |
| Sales | $ 40,000 |
| Interest Income | $ 500 |
| Cost of Goods Sold | $ 32,000 |
| Section 179 Expense | $ 7,000 |
| Tax-Exempt Income | $ 2,000 |
| Other Income | $ 5,000 |
*The land is a Section 1231 asset.
Answer the following questions:
A. Compute Jonah's share of ordinary income (loss) and separately stated items. Include his self-employment income as a separately stated item.
B. Compute Jonah's self-employment income but assume Ashanti Partnership is a limited partnership and Jonah is a limited partner.
C. Compute Jonah's self-employment income but assume Ashanti Partnership is an LLC and Jonah is personally liable for half of the debt of the LLC.
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