Carrie D'Lake, Reed A. Green, and Doug A. Divot share a passion for golf and decide to go into the golf club
manufacturing business together. On January 2, 2024, D'Lake, Green, and Divot form the Slicenhook Partnership, a
general partnership. Slicenhook's main product will be a perimeter-weighted titanium driver with a patented graphite shaft.
All three partners plan to actively participate in the business. The partners contribute the following property to form
Slicenhook:
Carrie had recently acquired the land with the idea that she would contribute it to the newly formed partnership. The
partners agree to share in profits and losses equally. Slicenhook elects a calendar year-end and the accrual method of
accounting.
In addition, Slicenhook received a $1,542,000$1,270,000 $642,000 ($428,000). With the remaining cash, Slicenhook
invests $73,000$69,000
The partnership is very successful in its first year. The success allows Slicenhook to use excess cash from operations to purchase \( \$ 57,000 \) of tax-exempt bonds (you can see the interest income already reflected in the operating results). The partnership also makes a principal payment on its loan from Big Bank in the amount of \( \$ 342,000 \) and a distribution of \( \$ 100,000 \) to each of the partners on December 31, 2024.
The partnership continues its success in 2025 with the following operating results:
The operating expenses include a \( \$ 2,500 \) trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of \( \$ 6,000 \). By the end of 2025, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for \( \$ 828,000 \) in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January 1, 2026. As of January 1, 2026, Slicenhook has the following assets:
Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest:
Slicenhook has not purchased or sold any equipment since its original purchase just after formation. d. Using the operating results, what are Slicenhook's ordinary Income and separately stated items for 2024 and 2025? What amount of Slicenhook's income for each perlod would each of the partners recelve?
Note: Round your Intermedlate calculatlons and final answers to the nearest whole dollar amount.
