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10 January, 19:00

On January 2 of the current year, Calloway and Taylor contribute cash equally to form the CT Partnership. Calloway and Taylor share profits and losses in a ratio of 75% and 25%, respectively. The partnership's ordinary income for the year was $40,000. Calloway received a distribution of $5,000 during the year. What is Calloway's share of taxable income for the year?

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  1. 10 January, 21:17
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    Calloway's share is $30,000

    Explanation:

    Partnership income for the year: $40,000

    Share of Calloway (75%) $30,000

    Share of Taylor (25%) $10,000

    Partnership's ordinary income is to be distributed among Calloway and Taylor in their respective profit and loss sharing ratios of 75% and 25%. Based on the above calculations, Calloway's share of Taxable Income for the year is $30,000.
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