Warren is a partner in Baines Brothers, a consulting firm specializing in the design of Intranets. Baines maintains a profit-sharing Keogh plan for its partners and employees. Warren owns a 7% partnership interest in Baines Brothers. Determine the maximum deductible contribution the partnership can make to the pension plan in each of the following situations:
a. The partnership’s ordinary income is $1,350,000, and it has no income or deductions that require separate reporting.
b. The partnership’s ordinary income is $4,000,000, and it has no income or deductions that require separate reporting.