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6. Rich is a 25% partner in RITZ General Partnership. At the beginning of 2020,...

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Accounting

6. Rich is a 25% partner in RITZ General Partnership. At the beginning of 2020, RITZ had $100,000 in liabilities and Rich's basis (including his share of the liabilities) in his partnership interest was $120,000. At the end of 2020, RITZ's liabilities had increased to $120,000.

2020 Activity:

Sales $220,000 COGS $83,000

Depreciation Expense $25,000

Administrative Expense $12,000

Guaranteed Payment to Rich $30,000

1231 Gain $12,000 1245 Gain $10,000

STCL from sale of stock $5,000

LTCL from sale of stock $6,000

LTCG from sale of stock $14,000

Charitable Contribution $4,000

a. Compute RITZ's Ordinary income and Separately Stated Items.

b. Compute Rich's basis at the end of 2020.

c. What would Rich report on his 2020 individual tax return as a result of RITZ's activities?

d. How much of Richs income from RITZ would be subject to self-employment tax?

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