Question 1

Which of the following partnership items are not included in the self-employment income calculation?

Accepted Answer

A) Ordinary income. 
B) Section 179 expense. 
C) Guaranteed payments. 
D) Gain on the sale of partnership property. 
A) Ordinary income. 
B) Section 179 expense. 
C) Guaranteed payments. 
D) Gain on the sale of partnership property.

Question 2

A pre-contribution gain occurs when a partner contributes appreciated property to a partnership and,within seven years,the partnership distributes the same property to another partner.

Accepted Answer

A) True 
 B)False

Question 3

Rental income and expenses are treated as:

Accepted Answer

A) Ordinary income for all partners. 
B) Separately stated because individual partners may treat rental income or losses differently. 
C) Capital gains or losses because the rental property is an investment. 
D) None of these. 
A) Ordinary income for all partners. 
B) Separately stated because individual partners may treat rental income or losses differently. 
C) Capital gains or losses because the rental property is an investment. 
D) None of these.

Question 4

Ordinary income includes interest income and dividend income received by the partnership.

Accepted Answer

A) True 
 B)False

Question 5

Calvin purchased a 30% partnership interest for $53,000 in March 2015.Calvin's share of partnership income was $5,000 in 2015,$25,000 in 2016,and ($9,000)in 2017.Calvin made no additional contributions to,or withdrawals from,the partnership.On December 1,2017,Calvin sold his partnership interest for $83,000.What is Calvin's gain or loss on the disposal?

Accepted Answer

A) $0. 
B) $9,000. 
C) $30,000. 
D) $83,000. 
A) $0. 
B) $9,000. 
C) $30,000. 
D) $83,000.

Question 6

Upon the sale of a partnership interest,a partner must recognize ordinary income if the partnership has substantially appreciated inventory or unrealized receivables.

Accepted Answer

A) True 
 B)False

Question 7

Partner Tami (a 20% partner)had the following items reported to her on a partnership Schedule K-1: $\begin{array}{lr}
\text { Ordinary income } & \$ 18,000 \
\text { Interest income } & 2,900 \
\text { Dividend income } & 1,300 \
\text { Section 179 expense } & 12,000 \
\text { Cash distribution } & 13,000
\end{array}$ Tami had a basis in her partnership interest of $14,000 at the beginning of the year.Additionally,the partnership has recourse liabilities of $100,000 outstanding at the end of the year.What is Tami's basis in her partnership interest at the end of the year?

Accepted Answer

A) $7,000. 
B) $11,200. 
C) $23,200. 
D) $31,200. 
A) $7,000. 
B) $11,200. 
C) $23,200. 
D) $31,200.

Question 8

A partner can recognize a loss on a liquidating distribution.

Accepted Answer

A) True 
 B)False

Question 9

The term "step-into-the-shoes" means that the partnership starts a new depreciation period for any depreciable asset contributed to the partnership.

Accepted Answer

A) True 
 B)False

Question 10

Ordinary income from a partnership is not considered self-employment income.

Accepted Answer

A) True 
 B)False

Question 11

Rita has a beginning basis in a partnership of $43,000.Rita's share of income and expense from the partnership consists of the following amounts:
 $\begin{array}{lr}
\text { Ordinary income } & \$ 36,00 0\
\text { Guaranteed payment } & 18,000 \
\text { Long-term capital gain } & 22,500 \
\text { §1231 gain } & 5,700\
\text { Charitable contributions } & 5,600 \
\text { §179 expense } & 23,00 0\
\text { Cash distribution } & 12,000
\end{array}$ a.What items are separately stated?
b.What is Rita's self-employment income?
c.Calculate Rita's partnership basis at the end of the year.

Accepted Answer

a.Guaranteed payments are both

Question 12

Nondeductible partnership items do not decrease a partner's basis in the partnership interest.

Accepted Answer

A) True 
 B)False

Question 13

Lacy contributes the following assets to a partnership for a 25% interest: $\begin{array}{lllll}&\text { Lacy's Basis }&FMV\
\text { Land } & \$  15,00 C & \$ 50,000 \
\text { Van } & \$  10,00 C & \$  15,000\
\text { Total }&\$25,000&\$65,000
\end{array}$ The land and the van have a basis to the partnership of:

Accepted Answer

A) Land $0;Van $0. 
B) Land $15,000;Van $10,000. 
C) Land $15,000;Van $15,000. 
D) Land $50,000;Van $15,000. 
A) Land $0;Van $0. 
B) Land $15,000;Van $10,000. 
C) Land $15,000;Van $15,000. 
D) Land $50,000;Van $15,000.

Question 14

Miguel contributes land to a partnership with a basis of $12,000 and a FMV of $18,000.How much gain will Miguel recognize?

Accepted Answer

A) $0. 
B) $6,000. 
C) $12,000. 
D) $18,000. 
A) $0. 
B) $6,000. 
C) $12,000. 
D) $18,000.

Question 15

Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000).What is Sabrina's basis in her partnership interest at the end of the year?

Accepted Answer

A) $0. 
B) $2,000. 
C) $7,000. 
D) $12,000. 
A) $0. 
B) $2,000. 
C) $7,000. 
D) $12,000.

Question 16

Liquidation occurs when a partner's entire interest is redeemed by the partnership.

Accepted Answer

A) True 
 B)False

Question 17

Jose purchased a 30% partnership interest for $38,000 in June 2014.Jose's share of partnership income was $8,000 in 2014,$12,000 in 2015,$28,000 in 2016,and $6,000 in 2017.Jose made no additional contributions to,or withdrawals from,the partnership.On December 29,2017,Jose sold his partnership interest for $108,000.What is Jose's gain or loss on the sale of his partnership interest?

Accepted Answer

Jose would have a lo

Question 18

If a partner contributes services on the formation of a partnership,how much income does the service partner recognize,if any?

Accepted Answer

A) $0. 
B) $0,unless the partner receives a cash distribution. 
C) An amount equal to the FMV of the services rendered. 
D) $0 if the partner's basis was $0 when the services were performed. 
A) $0. 
B) $0,unless the partner receives a cash distribution. 
C) An amount equal to the FMV of the services rendered. 
D) $0 if the partner's basis was $0 when the services were performed.

Question 19

Anna has a $25,000 basis in her partnership interest when she receives liquidating distributions from the partnership.Anna receives cash of $18,000 and computer equipment with a basis to the partnership of $15,000.What are the tax consequences of the liquidating distributions to Anna?

Accepted Answer

@#IMG-DLM& Since computer equipment was

Question 20

Section 179 expense is reported as a(an):

Accepted Answer

A) Ordinary deduction to a partnership. 
B) Separately stated item. 
C) Both as an ordinary deduction and as a separately stated item. 
D) Capital loss to the partnership. 
A) Ordinary deduction to a partnership. 
B) Separately stated item. 
C) Both as an ordinary deduction and as a separately stated item. 
D) Capital loss to the partnership.

Which of the following partnership items are not included in the self-employment income calculation?

A pre-contribution gain occurs when a partner contributes appreciated property to a partnership and,within seven years,the partnership distributes the same property to another partner.

Rental income and expenses are treated as:

Ordinary income includes interest income and dividend income received by the partnership.

Upon the sale of a partnership interest,a partner must recognize ordinary income if the partnership has substantially appreciated inventory or unrealized receivables.

A partner can recognize a loss on a liquidating distribution.

The term "step-into-the-shoes" means that the partnership starts a new depreciation period for any depreciable asset contributed to the partnership.

Ordinary income from a partnership is not considered self-employment income.

Nondeductible partnership items do not decrease a partner's basis in the partnership interest.

Lacy contributes the following assets to a partnership for a 25% interest: Lacy's Basis FMV Land \ 15,00C \ 50,000 Van \ 10,00C \ 15,000 Total \2 5,000 \6 5,000 The land and the van have a basis to the partnership of:

Miguel contributes land to a partnership with a basis of $12,000 and a FMV of $18,000.How much gain will Miguel recognize?

Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000).What is Sabrina's basis in her partnership interest at the end of the year?

Liquidation occurs when a partner's entire interest is redeemed by the partnership.

If a partner contributes services on the formation of a partnership,how much income does the service partner recognize,if any?

Anna has a $25,000 basis in her partnership interest when she receives liquidating distributions from the partnership.Anna receives cash of $18,000 and computer equipment with a basis to the partnership of $15,000.What are the tax consequences of the liquidating distributions to Anna?

Section 179 expense is reported as a(an):

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Corporate Taxation

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Exam 14: Partnership Taxation

Which of the following partnership items are not included in the self-employment income calculation?

A pre-contribution gain occurs when a partner contributes appreciated property to a partnership and,within seven years,the partnership distributes the same property to another partner.

Rental income and expenses are treated as:

Ordinary income includes interest income and dividend income received by the partnership.

Upon the sale of a partnership interest,a partner must recognize ordinary income if the partnership has substantially appreciated inventory or unrealized receivables.

A partner can recognize a loss on a liquidating distribution.

The term "step-into-the-shoes" means that the partnership starts a new depreciation period for any depreciable asset contributed to the partnership.

Ordinary income from a partnership is not considered self-employment income.

Nondeductible partnership items do not decrease a partner's basis in the partnership interest.

Lacy contributes the following assets to a partnership for a 25% interest: Lacy's Basis FMV Land \ 15,00C \ 50,000 Van \ 10,00C \ 15,000 Total \2 5,000 \6 5,000 The land and the van have a basis to the partnership of:

Miguel contributes land to a partnership with a basis of $12,000 and a FMV of $18,000.How much gain will Miguel recognize?

Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000).What is Sabrina's basis in her partnership interest at the end of the year?

Liquidation occurs when a partner's entire interest is redeemed by the partnership.

If a partner contributes services on the formation of a partnership,how much income does the service partner recognize,if any?

Anna has a $25,000 basis in her partnership interest when she receives liquidating distributions from the partnership.Anna receives cash of $18,000 and computer equipment with a basis to the partnership of $15,000.What are the tax consequences of the liquidating distributions to Anna?

Section 179 expense is reported as a(an):

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Corporate Taxation

Filters