Question

Freeman, a single individual, reported the following income in the current year: Guaranteed payment from services rendered to a partnership $50,000 Ordinary income from an S corporation 20,000 What amount of Freeman's income is subject to self-employment tax

Answer 1

Answer: $50,000

Explanation:

Based on the information given in the question, the amount of Freeman's income that is subject to self-employment tax is $50000.

It should be noted thdt the amounts that are gotten as guaranteed payments from the services that are being rendered to a partnership would be subject to self-employment tax. Basically, such amount is considered to be identical to the partner's salary.