1. Derohanian and Duan are equal partners in the DD Partnership. For the current year ended December 31, the partnership has taxable income of $75,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Derohian, $35,000; and Duan, $25,000; and (2) charitable contributions, $6,000. What amount should be reported as OBI on the partnership return?

   a.141,000
   b.135,000
   c. 81,000
   d. 75,000

2. During the year, Baral Corporation had the following transactions:
   
   Net income per books (after tax) 50,000
   Included in that amount were the following items

   FIT	7,000
   Interest income from Federal treasury bonds	4,000
   Interest expense paid on loan (proceeds were used to purchase treasury bonds)	3,500
   Interest income from municipal bonds	2,000
   Premiums paid on life ins policy where the employee is the beneficiary	8,000
   Net capital gain (9,000 LTCG less 5,500 STCL)	3,500

   Compute taxable income.

Answer rating: 100% (QA)

DD Partnership As mentioned in sec 703 of IRC no deduction shall be allowed to the partnership for t... View the full answer