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Rex became a partner with a 30% interest in the partnership profits when he invested $200,000. In 2019, the partnership generated $400,000 of taxable income, and Rex withdrew $100,000. In 2020, the partnership had $600,000 of taxable income and Rex withdrew $200,000. What is Rex’s gross income from the partnership in 2019 and 2020?

Respuesta :

Answer:

The Rex’s gross income from the partnership in 2019 and 2020 is $1,20,000 and $1,80,000 respectively

Explanation:

The computation of the gross income for each year is shown below:

In 2019:

Gross income = Taxable income × percentage of interest in profits

                       = $400,000 × 30%

                       = $1,20,000

In 2020:

Gross income = Taxable income × percentage of interest in profits

                       = $600,000 × 30%

                       = $1,80,000

The withdrawn amount is not consider for computing the gross income. So, we ignored it

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