Tom, Mary and Chris are partners in the TMC Partnership. Tom is the only partner who is involved in the daily activities of the partnership and, thus, the partnership agreement stipulates that 70% of the partnership business income and losses will be allocated to Tom; the remaining 30% will be shared equally by Mary and Chris. The three partners share equally in all other sources of partnership income. For the current year the TMC Partnership had the following sources of income (losses):
Business income………………….$400,000
Rental loss………………….(30,000)
Interest income…………………. 9,000
Taxable capital gains…………… 21,000
Allowable capital losses………… (15,000)
………………….…………………. $385,000
The partnership did not distribute any of the current year profits to the partners. Prepare a chart showing the allocation of the income (losses) to the partners for tax purposes. Income Tax Act reference: ITA 96(1)(f), (g).