Reference no: EM132447295
Question - Meg and Abby are equal partners in the AM Partnership, which earns $40,000 ordinary income, $6,000 long-term capital gain (LTCG), and $2,000 Sec. 1231 loss during the current year. What is the amount and character of income that must be reported on Abby's tax return for this year's partnership operations?
A. $22,000 ordinary income.
B. $19,000 ordinary income, $3,000 LTCG.
C. $20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss.
D. $23,000 ordinary income, $1,000 Sec. 1231 loss.