Nick, chris, stacey, and mike are each 25% partners in liberty partnership, a general partnership. during the current year, the partnership had revenues of $300,000 and nonseparately allocated business expenses of $100,000, including a guaranteed payment of $30,000 to nick for services rendered. also, during the current year, the partnership had interest income of $10,000 and charitable contributions of $16,000. with regard to activity in the partnership, what should stacey report on her income tax return for the current year?

Stacey report on her income tax return in three categories

1. Total ordinary income = $50,000

2. Interest income = $2,500

3. Charitable contributions = $4,000

Explanation:

Basically, Stacey report on her income tax return in three categories

1. Total ordinary income: It is somewhat same as net income

So, the ordinary income equal to

= (Revenues - expenses) × partnership percentage

= ($300,000 - $100,000)  × 25%

= $50,000

2. Interest income: It is computed below

= Interest income × partnership percentage

= $10,000 × 25%

= $2,500

3. Charitable contribution: It is computed below

=  Charitable contributions × partnership percentage

= $16,000 × 25%

= $4,000

answer; break-even analysis;

answer; situational irony;