Bonnie and George are equal general partners in BG Partnership. Bonnie receives a $4,000 monthly guaranteed payment for services. This year, BG generated $95,000 profit (before consideration of Bonnie’s guaranteed payments).
a. Compute each partner’s distributive share of ordinary business income.
b. Compute each partner’s self-employment income.
c. How would your answers change if BG’s profit was only $32,000 instead of $95,000? (Losses should be indicated by a minus sign.)