Don Ferris and Lou Lindberg are the two partners in F&L Partnership. The partnership agreement provides that all income is allocated equally between Don and Lou but in no case shall the allocation to Don be less than $75,000 per year. (In other words, Don has a minimum guarantee of $75,000.) This year, F&L generated $107,200 net profit. Compute F&L’s taxable income for the year and each partner’s distributive share of that income.
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