Jim formed Taxman Associates, a partnership, on February 1^st 2018 with four other partners. Each partner contributes $30,000 in return for an equal share of profits in the partnership (20%). The following income statement was prepared for Taxman Associates:

Each partner drew $120,000 from the partnership in 2022.

Bob has no other income for the year 2022. He has a net capital loss of $150,000 available to be carried forward from prior years.

REQUIRED

Compute Bob's income for tax purposes as a result of his participation in the partnership, and his taxable income, for the year 2022. Determine any federal tax credits Bob is eligible for as a result of his participation in the partnership.

Transcribed Image Text:

TAXMAN ASSOCIATES INCOME STATEMENT For the Year Ended December 31, 2020 Gross revenue $878,210 Less: Office salaries $ 85,500 Rent 40,500 Office supplies 17,500 Capital cost allowance 20,060 Donations. 247,500 (411,110) Capital gain on sale of land (capital property) $135,000 Dividend income: Non-eligible dividends Capital dividends.. 36,000 14,400 185,400 Net income $652,500 TAXMAN ASSOCIATES INCOME STATEMENT For the Year Ended December 31, 2020 Gross revenue $878,210 Less: Office salaries $ 85,500 Rent 40,500 Office supplies 17,500 Capital cost allowance 20,060 Donations. 247,500 (411,110) Capital gain on sale of land (capital property) $135,000 Dividend income: Non-eligible dividends Capital dividends.. 36,000 14,400 185,400 Net income $652,500

Answer rating: 100% (QA)

Bobs Income and Tax Implications for 2022 1 Partnership Income Taxman Associates Net Income 652500 B... View the full answer