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The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $15,100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results:

a-1. How much ordinary income (loss) is allocated to Gary for the year?

a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss).

b. Compute Gary's share of self-employment income (loss) to be reported on his year 1 Schedule K-1, assuming G&P is a limited partnership and Gary is a limited partner.

c. What do you believe Gary's share of self-employment income (loss) to be reported on his year 1 Schedule K-1 should be, assuming G&P is an LLC and Gary spends 2,000 hours per year working there full time?

SalesrevenueGainonsaleofland($1231)CostofgoodssoldDepreciation-MACRSEmployeewagesCashcharitablecontributionsMunicipalbondinterestOtherexpensesNote:Negativeamountsshouldbeindicatedbyaminus$89,5007,850(45,700)(14,400)(20,900)(3,700)3,700(4,800) Note: sign. \begin{tabular}{|l|l|l|} \hline \multicolumn{1}{|c|}{ Description } & Total \\ Amount & Allocated to Gary \\ \hline Separately Stated Items on Schedule K-1: & \\ \hline \end{tabular} SalesrevenueGainonsaleofland($1231)CostofgoodssoldDepreciation-MACRSEmployeewagesCashcharitablecontributionsMunicipalbondinterestOtherexpensesNote:Negativeamountsshouldbeindicatedbyaminus$89,5007,850(45,700)(14,400)(20,900)(3,700)3,700(4,800) Note: sign. \begin{tabular}{|l|l|l|} \hline \multicolumn{1}{|c|}{ Description } & Total \\ Amount & Allocated to Gary \\ \hline Separately Stated Items on Schedule K-1: & \\ \hline \end{tabular}

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