15. DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and...

 

Transcribed Image Text:

15. DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments to partner Percy of $20,000. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character? a. $24,000 ordinary income. b. $24,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment. c. $25,600 ordinary income. d. $32,000 ordinary income, $1,600 interest income. e. $32,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment. 15. DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments to partner Percy of $20,000. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character? a. $24,000 ordinary income. b. $24,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment. c. $25,600 ordinary income. d. $32,000 ordinary income, $1,600 interest income. e. $32,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment.

Answer rating: 100% (QA)

Ans Optionb 24000 ordinary income 1600 Interest income 20000 guaranteed payment Explanati... View the full answer