Exam 16: Limited Partnerships and Joint Ventures

Explore all topics

Wayne and Wendy are equal partners in ABC Windows.Wayne is a general partner and Wendy is a limited partner.Each partner invested $20,000 in the company.ABC Windows experienced a loss of $50,000 this year.Which of the following statements regarding this loss is TRUE?

Free

(Multiple Choice)

4.9/5

(80)

Question 1

Correct Answer:

Verified

A friend of yours is considering entering into a joint venture but knows very little about this form of business structure.You have been asked to provide the following information. A)What is the purpose of a joint venture? B)How are joint ventures taxed? C)Give an example of a joint venture.

Free

(Essay)

4.9/5

(85)

Question 2

Correct Answer:

Verified

A)The purpose of a joint venture is to carry out a single transaction or to engage in an activity of limited duration.
B)A joint venture is not a separate taxable entity.The income from a joint venture is distributed to its members,and members can individually choose the timing and use of some expenses,such as CCA and doubtful accounts.The full small business deduction is available (unlike in a partnership which apportions the deduction based on partner percentages)provided it has not been used for other income in the joint venture corporation.
C)Examples of joint ventures are: construction projects,resource exploration activities,research and development projects,entertainment projects - i.e.movies,concerts,and plays.

An investor has $50,000 to invest as a limited partner in a partnership.The individual will be one of several limited partners in the business.The business is not expected to make a profit for at least three years.Why has the investor most likely chosen to invest in this business?

Free

(Multiple Choice)

4.7/5

(77)

Question 3

Correct Answer:

Verified

While partnerships and joint ventures have some similarities,they have significant differences.Which of the following is FALSE with regard to partnerships and joint ventures?

(Multiple Choice)

4.8/5

(70)

Question 4

Jerome has a 10% interest in a limited partnership.The adjusted cost base of Jerome's partnership interest at the beginning of 20x0 was $30,000.During 20x0 the partnership reported a $10,000 taxable capital gain and $150,000 in business income.At the end of 20x0 Jerome had an outstanding loan balance of $10,000 with the partnership. Required: Determine Jerome's at-risk amount at the end of the year.

(Essay)

4.9/5

(89)

Question 5

Three Hills Partnership had profits of $210,000 in 20x1.Shawna Hill invested $100,000 as a limited partner,and her partnership interest is 30%.Shawna is in a 45% tax bracket.What is Shawna's after-tax return on her investment in the partnership? (Rounded)

(Multiple Choice)

5.0/5

(94)

Question 6

Steven invested $25,000 as a limited partner in a partnership in 20x7.His partnership interest is 30%.The partnership reported a business loss of $100,000 in 20x7.Steven is in a 45% tax bracket.What is the net cash cost of Steven's investment in 20x7?

(Multiple Choice)

4.8/5

(81)

Question 7

Teresa White is one of 5 limited partners in House Designs Enterprises (HDE).Each limited partner contributed $100,000 five years ago when the enterprise began.During the current year,HDE generated pre-tax profits of $500,000.The only general partner,Betty Carmel,receives 55% of the company's profits.Both Teresa and Betty are subject to a 49% marginal personal tax rate. Required: Calculate Teresa's after-tax rate of return on her investment.

(Essay)

4.9/5

(72)

Question 8

Showing 1 - 8 of 8

Wayne and Wendy are equal partners in ABC Windows.Wayne is a general partner and Wendy is a limited partner.Each partner invested $20,000 in the company.ABC Windows experienced a loss of $50,000 this year.Which of the following statements regarding this loss is TRUE?

A friend of yours is considering entering into a joint venture but knows very little about this form of business structure.You have been asked to provide the following information. A)What is the purpose of a joint venture? B)How are joint ventures taxed? C)Give an example of a joint venture.

An investor has $50,000 to invest as a limited partner in a partnership.The individual will be one of several limited partners in the business.The business is not expected to make a profit for at least three years.Why has the investor most likely chosen to invest in this business?

While partnerships and joint ventures have some similarities,they have significant differences.Which of the following is FALSE with regard to partnerships and joint ventures?

Three Hills Partnership had profits of $210,000 in 20x1.Shawna Hill invested $100,000 as a limited partner,and her partnership interest is 30%.Shawna is in a 45% tax bracket.What is Shawna's after-tax return on her investment in the partnership? (Rounded)

Steven invested $25,000 as a limited partner in a partnership in 20x7.His partnership interest is 30%.The partnership reported a business loss of $100,000 in 20x7.Steven is in a 45% tax bracket.What is the net cash cost of Steven's investment in 20x7?

Taxation-Its Role in Decision Making

Fundamentals of Tax Planning

Liability for Tax, Income Determination, and Administration of the Income Tax System

Income From Employment

Income From Business

The Acquisition, Use, and Disposal of Depreciable Property

Income From Property

Gains and Losses on the Disposition of Capital Propertycapital Gains

Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Individuals: Determination of Taxable Income and Taxes Payable

Corporationsan Introduction

Organization, Capital Structures, and Income Distributions of Corporations

The Canadian-Controlled Private Corporation

Multiple Corporations and Their Reorganization

Partnerships

Trusts

Business Acquisitions and Divestituresassets Versus Shares

Business Acquisitions and Divestiturestax-Deferred Sales

Domestic and International Business Expansion

Tax Aspects of Corporate Financing

Gsthst Overview

Filters