[kcoops44]

So for Questions #1576, I believe the answer that is indicated as correct, is actually incorrect.

Jetson and Tomson are equal partners in JT Partnership, which has the following income and expense items:

Sales $100,000
Interest income from checking account 1,000
Charitable contributions 3,000
Employee wages 4,000
Cost of goods sold 50,000

What is the nonseparately stated partnership income?

A.
$43,000

B.
$44,000

C.
$46,000

D.
$47,000

I calculated $47,000 because the interest should be included in ordinary partnership income since it is not tax exempt. However, the answer according to NINJA is $46,000. There was also another problem that excluded taxable interest from ordinary partnership income and NINJA marked that incorrect also. It’s weird because the explanation also indicates that interest income is included in ordinary business income for partnership purposes yet it isn’t included in the calculation for the answer.

here is the official explanation:
A partnership computes its income and reports only trade or business activity deductions. The ordinary business income for a partnership is computed as:

gross receipts or sales less cost of goods sold plus other partnership income, less
salaries and wages,
repairs and maintenance,
bad debts,
rent,
taxes and licenses,
interest,
depreciation,
retirement plans, and
other deductions.
Certain deductions, however, are not allowed to the partnership. Items that are separately stated on the partnership return and included as separate items on the partners’ returns are:

ordinary income or loss from trade or business activities,
net income or loss from rental real estate activities,
net income or loss from other rental activities,
guaranteed payments to partners,
interest income, dividends, and royalties,
gains and losses from sales or exchanges of property described in IRC Section 1231,
dividends (passed through to corporate partners) that are eligible for the dividends-received deduction,
taxes paid or accrued to foreign countries and U.S. possessions, and
other items of income, gain, loss, deduction (e.g., IRC Section 179, charitable contributions), or credit, as provided by regulations. Examples include nonbusiness expenses, intangible drilling and development costs, and soil and water conservation expenses.
The nonseparately stated partnership income or otherwise known as ordinary income from the trade or business is $46,000, which is the difference between the sales income of $100,000 less cost of goods sold of $50,000 and less employee wages of $4,000.

Perhaps I am wrong or maybe I’m interpreting it incorrectly but I just wanted to ask to make sure.