Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of partnership items: Ordinary income: $25,000 Section 1231 loss: (3,000) Nondeductible expense: 1,000 Cash distribution: 5,000 Required: a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction. b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Rochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of partnership items: Ordinary income: $25,000 Section 1231 loss: (3,000) Nondeductible expense: 1,000 Cash distribution: 5,000 Required: a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction. b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
Chapter21: Partnerships
Section: Chapter Questions
Problem 7BCRQ
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Question
Rochelle is a limited partner in Megawatt Partnership . For 2021, her schedule K-1 from the partnership reported the following share of partnership items:
Ordinary income: $25,000
Section 1231 loss: (3,000)
Nondeductible expense: 1,000
Cash distribution: 5,000
Required:
a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction.
b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT