This year, Darrel’s distributive share from Alcove Partnership includes $6,000 of interest income, $3,000 of dividend income, and $70,000 ordinary business income.a. Assume that Darrel materially participates in the partnership. How much of his distributive share from Alcove Partnership is potentially subject to the net investment income tax?

Question
Asked Feb 13, 2019

This year, Darrel’s distributive share from Alcove Partnership includes $6,000 of interest income, $3,000 of dividend income, and $70,000 ordinary business income.

a. Assume that Darrel materially participates in the partnership. How much of his distributive share from Alcove Partnership is potentially subject to the net investment income tax?

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Expert Answer

Step 1

Partnership means two or more persons jointly running the business for the purpose of earn some profit under a legal partnership deed.

Partnership share income is different form the ordinary business. Because ordinary business have different entities form the partnership.

Step 2

According to this question, Darrel`s materially participates in the partnership firm so $6000 only the interest income because this is only the income which is direct related to the partnership.

Dividend income is related to the company`s ...

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