Harvey and jeffrey were the only partners in the current yea

Reference no: EM13995082

On December 31 of last year, Harvey gave his son, Jeffrey, a gift of a 30% interest in a partnership in which capital is a material income-producing factor. For the current calendar year, the partnership's ordinary income was $150,000. Harvey and Jeffrey were the only partners in the current year. There were no guaranteed payments to partners. Harvey's services performed for the partnership were worth a reasonable compensation of $50,000 for the current year. Jeffrey has never performed any services for the partnership. What is Harvey's distributive share of partnership income for the current year?

a. $150,000.

b. $120,000.

c. $75,000.

d. $30,000.

e. None of the above.

Reference no: EM13995082

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