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  1. business
  2. accounting
  3. this year, the tastee partnership reported income

This year, the Tastee Partnership reported income before guaranteed payments of $92,000. Stella owns a...

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Accounting

This year, the Tastee Partnership reported income before guaranteed payments of $92,000. Stella owns a 90% profits interest and works 1,600 hours per year in the business. Euclid owns a 10% profits interest (with a basis of $30,000 at the beginning of the tax year) and performs no services for the partnership during the year. For services performed during the year, Stella receives a "salary" of $6,000 per month. Euclid withdrew $10,000 from the partnership during the year as a normal distribution of cash from Tastee (i.e., not for services).

d. How much income will Euclid report?

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