• Polytechnic University of the Philippines

• BSA ACCO 2033

1. A & Co. is a general professional partnership, with Partners A and B sharing equally in the

partnership net income of net loss. In a calendar year, the partnership and the partners had the

following income tax data:

A & Co.

Gross Income P 1,000,000

Expenses of Operations 400,000

Partner A:

Gross Income P 600,000

Expenses related to gross income 300,000

Partner B:

Gross Income P 700,000

Expenses related to gross income 450,000

If the partnership availed of the Optional Standard Deduction, compute for:

Income tax of A & Co.

Gross income P 1,000,000

Less: OSD (1,000,000*40%) 400,000

Net Income P 600,000

Distributive share of Partner A and B

(600,000 x 50%) P 300,000

Less: Withholding tax (300,000 x 10%) 30,000

Distributive share of Partner A and B,

net of withholding tax P 270,000

Ø The partnership is a general professional partnership. As such, it is not subject to income

tax.