Faye, Gary, and Heidi each have a one-third interest in the capital and profits of the FGH Partnership. Each partner had a capital account of $50,000 at the beginning of the tax year. The partnership profits for the tax year were $270,000. Changes in their capital accounts during the tax year were as follows: Faye Gary Heidi Total
Beginning balance $50,000 $50,000 $50,000 $150,000
Withdrawals (20,000) (35,000) (10,000) (65,000)
Additional contributions -0- -0- 5,000 5,000
Allocation of profits 90,000 90,000 90,000 270,000
Ending balance $120,000 $105,000 $135,000 $360,000
In arriving at the $270,000 of partnership profits, the partnership deducted $2,400 ($800 for each partner) in premiums paid for group term life insurance on the partners. Faye and Gary are 39 years old, and Heidi is 35 years old. Other employees are also eligible for group term life insurance equal to their annual salary. These premiums of $10,000 have been deducted in calculating the partnership profits of $270,000.
Each partner's gross income from the partnership for the tax year is $
Community Property (LO. 3)
Liz and Doug were divorced on December 31 of the current year after 10 years of marriage. Their current year's income received before the divorce was as follows:
Doug's salary $41,000
Liz's salary $55,000
Rent on apartments purchased by Liz 15 years ago $8,000
Dividends on stock Doug inherited from his mother 4 years ago $1,900
Interest on a savings account in Liz's name funded with her salary $2,400
Allocate the income to Liz and Doug assuming that they live in:
a. California.
Doug: $ Liz: $
b. Texas.
Doug: $ Liz: $