(Solution) - Warren is a partner in Baines Brothers a consulting firm -(2025 Original AI-Free Solution)

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Warren is a partner in Baines Brothers, a consulting firm specializing in the design of Intranets. Baines maintains a profit-sharing Keogh plan for its partners and employees. Warren owns a 7% partnership interest in Baines Brothers. Determine the maximum deductible contribution the partnership can make to the pension plan in each of the following situations:
a. The partnership?s ordinary income is $1,350,000, and it has no income or deductions that require separate reporting.
b. The partnership?s ordinary income is $4,000,000, and it has no income or deductions that require separate reporting.