On September 30 Partner C buys ½ of partner A’s interest in the equal AB calendaryear partnership, so A and C each own 25% after the sale. For the year, the partnership earns income of $2,000 a month for January through August, and $6,000 a month for September through December. How much income will A and C each have from the partnership under (a) the interim closing method and (b) the proration of partnership income method?
On September 30 Partner C buys ½ of partner A’s interest in the equal AB calendaryear partnership, so A and C each own 25% after the sale. For the year, the partnership earns income of $2,000 a month for January through August, and $6,000 a month for September through December. How much income will A and C each have from the partnership under (a) the interim closing method and (b) the proration of partnership income method?
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 12DQ
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Question
On September 30 Partner C buys ½ of partner A’s interest in the equal AB calendaryear
earns income of $2,000 a month for January through August, and $6,000 a month for
September through December. How much income will A and C each have from the
partnership under (a) the interim closing method and (b) the proration of partnership
income method?
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