Partner D was given (by his mother) his 20% interest in a business in which capital...

 

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Partner D was given (by his mother) his 20% interest in a business in which capital is not a material income- producing factor, resulting in a partnership in which D and his mother are the only partners. The partnership agreement states that D will get a distributive share of 20% of the partnership income, but his mother has capital of $360,000 in the partnership, and D's capital (given to him by his mother) was $40,000. The income of the partnership before consideration of any guaranteed payment is $300,000. His mother performs services for the partnership worth $100,000, but only takes a guaranteed payment of $40,000 in return. D performs no services for the partnership, and any distribution in liquidation or withdrawal is based on capital account balances. How much should D's distributive share of partnership income be? $8,000 $22,0000 $30,000 $0 Partner D was given (by his mother) his 20% interest in a business in which capital is not a material income- producing factor, resulting in a partnership in which D and his mother are the only partners. The partnership agreement states that D will get a distributive share of 20% of the partnership income, but his mother has capital of $360,000 in the partnership, and D's capital (given to him by his mother) was $40,000. The income of the partnership before consideration of any guaranteed payment is $300,000. His mother performs services for the partnership worth $100,000, but only takes a guaranteed payment of $40,000 in return. D performs no services for the partnership, and any distribution in liquidation or withdrawal is based on capital account balances. How much should D's distributive share of partnership income be? $8,000 $22,0000 $30,000 $0

Answer rating: 100% (QA)

0 is the correct option If capital is not a material incomeproducing factor a partn... View the full answer