Partnership Charitable Contributions
Response to the following problem:
Leona and Calley operate a placement service as partners, sharing profits and losses equally. During the current calendar year, the partnership contributes $3,000 to Calley's alma mater, State University. The partnership treats this contribution as an expense in computing its $47,500 profit from operations.
a. Is the partnership entitled to treat the contribution to State University as a deduction from ordinary income in the partnership return?
b. What is each partner's distributive share of ordinary income from the partnership?
c. Can each partner claim a deduction on her personal income tax return for the contribution the partnership made to State University? If so, how much?