Question 1

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 2

Paris,a 60% partner in Omega Partnership,has a basis of $25,000 in her partnership interest.Paris receives a cash distribution of $24,000 at year-end.What is Paris's basis in her partnership interest at the end of the year?

Accepted Answer

A) $25,000. 
B) $24,000. 
C) $1,000. 
D) $0. 
A) $25,000. 
B) $24,000. 
C) $1,000. 
D) $0.

Question 3

Raul contributes the following assets to a partnership for a 50% interest:   What is Raul's basis in his partnership interest?

Accepted Answer

A) $100,000. 
B) $155,000. 
C) $50,000. 
D) $0. 
A) $100,000. 
B) $155,000. 
C) $50,000. 
D) $0.

Question 4

Calvin purchased a 30% partnership interest for $53,000 in March 2014.Calvin's share of partnership income was $5,000 in 2014,$25,000 in 2015,and $9,000)in 2016.Calvin made no additional contributions to,or withdrawals from,the partnership.On December 1,2016,Calvin sold his partnership interest for $83,000.What is Calvin's gain or loss on the disposal?

Accepted Answer

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

Question 5

A guaranteed payment is treated as:

Accepted Answer

A) An ordinary expense. 
B) Both a separately stated item and an ordinary expense. 
C) A separately stated item. 
D) None of these. 
A) An ordinary expense. 
B) Both a separately stated item and an ordinary expense. 
C) A separately stated item. 
D) None of these.

Question 6

Rich is a partner in RKW partnership.Rich owned 50% from January 1,2016 to April 30,2016,when he bought Kevin's 25% interest.He owned 75% for the rest of the year assume a 365-day year).The partnership had ordinary income of $150,000 and $25,000 in long-term capital gains.Barring any special allocations in a partnership agreement,Rich's share of the income items is:

Accepted Answer

A) $150,000 ordinary income; $25,000 capital gain. 
B) $75,000 ordinary income; $12,500 capital gain. 
C) $100,172 ordinary income; $16,696 capital gain. 
D) $112,500 ordinary income; $18,750 capital gain. 
A) $150,000 ordinary income; $25,000 capital gain. 
B) $75,000 ordinary income; $12,500 capital gain. 
C) $100,172 ordinary income; $16,696 capital gain. 
D) $112,500 ordinary income; $18,750 capital gain.

Question 7

Guaranteed payments are always determined with regard to partnership income.

Accepted Answer

A) True 
 B)False

Question 8

A partner's share of recourse liabilities increases the partner's basis in his or her partnership interest.

Accepted Answer

A) True 
 B)False

Question 9

Partner Spence had the following items reported on a partnership Schedule K-1:   Spence had a basis in his partnership interest of $23,000 at the beginning of the year.What is Spence's basis in his partnership interest at the end of the year?

Accepted Answer

A) $31,200. 
B) $54,200. 
C) $21,000. 
D) $70,200. 
A) $31,200. 
B) $54,200. 
C) $21,000. 
D) $70,200.

Question 10

Partner Jamie has a basis of $10,000 in a partnership at the beginning of the year.She receives $5,000 in cash distributions,her distributive share of income is $3,000,and she receives an equipment distribution with a basis of $6,000 FMV $12,000).Jamie's basis in her partnership interest at the end of the year is:

Accepted Answer

A) $13,000. 
B) $0. 
C) $8,000. 
D) $2,000. 
A) $13,000. 
B) $0. 
C) $8,000. 
D) $2,000.

Question 11

If Jake contributes land to a partnership with a basis of $12,000 and a FMV of $18,000,the partnership will have a basis in the asset of $12,000.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

Guaranteed payments are the only items that are reported both as a deduction for ordinary income and as a separately stated item.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is reported as a separately stated item from a partnership?

Accepted Answer

A) Depreciation expense. 
B) Sales income. 
C) Capital gain. 
D) Interest expense to buy business equipment. 
A) Depreciation expense. 
B) Sales income. 
C) Capital gain. 
D) Interest expense to buy business equipment.

Question 15

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,unless the partner receives a cash distribution. 
B) $0. 
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,unless the partner receives a cash distribution. 
B) $0. 
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 16

Charley is a partner in Charley,Austin,Liz & Bass Partnership.Charley owned 25% from January 1,2016 to April 1,2016 when he bought both Liz's 25% and Bass's 25% interests.He owned 75% for the rest of the year.The partnership had ordinary income of $358,000 and $12,000 in long-term capital gains.Barring any special allocations in a partnership agreement,what is Charley's share of income assume a 365-day year)?

Accepted Answer

The answer of Charley is a partner in Charley,Austin,Liz &...

Question 17

All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.

Accepted Answer

A) True 
 B)False

Question 18

If Casey's partnership basis is only $100,000 and Cherie's basis is $200,000,there is no way both Casey and Cherie can be equal partners at 50% each in the partnership.

Accepted Answer

A) True 
 B)False

Question 19

Caroline,Jessica,and Samantha form a partnership.Caroline contributes a building,Jessica contributes cash and Samantha will operate the business.   How much income must Samantha recognize?

Accepted Answer

A) $0. 
B) $500,000. 
C) $480,000. 
D) $400,000. 
A) $0. 
B) $500,000. 
C) $480,000. 
D) $400,000.

Question 20

A partnership has $23,000 of depreciation expense and $25,000 of Section 179 expense.How are the depreciation and Section 179 expenses reported?

Accepted Answer

A) Depreciation is treated as a $23,000 ordinary expense and the $25,000 Section 179 expense is separately stated. 
B) As a $48,000 ordinary expense item. 
C) Section 179 is treated as a $25,000 ordinary expense and the $23,000 depreciation is separately stated. 
D) Both as separately stated items. 
A) Depreciation is treated as a $23,000 ordinary expense and the $25,000 Section 179 expense is separately stated. 
B) As a $48,000 ordinary expense item. 
C) Section 179 is treated as a $25,000 ordinary expense and the $23,000 depreciation is separately stated. 
D) Both as separately stated items.

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

Paris,a 60% partner in Omega Partnership,has a basis of $25,000 in her partnership interest.Paris receives a cash distribution of $24,000 at year-end.What is Paris's basis in her partnership interest at the end of the year?

Raul contributes the following assets to a partnership for a 50% interest: What is Raul's basis in his partnership interest?

A guaranteed payment is treated as:

Guaranteed payments are always determined with regard to partnership income.

A partner's share of recourse liabilities increases the partner's basis in his or her partnership interest.

Partner Spence had the following items reported on a partnership Schedule K-1: Spence had a basis in his partnership interest of $23,000 at the beginning of the year.What is Spence's basis in his partnership interest at the end of the year?

If Jake contributes land to a partnership with a basis of $12,000 and a FMV of $18,000,the partnership will have a basis in the asset of $12,000.

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?

Guaranteed payments are the only items that are reported both as a deduction for ordinary income and as a separately stated item.

Which of the following is reported as a separately stated item from a partnership?

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

All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.

If Casey's partnership basis is only $100,000 and Cherie's basis is $200,000,there is no way both Casey and Cherie can be equal partners at 50% each in the partnership.

Caroline,Jessica,and Samantha form a partnership.Caroline contributes a building,Jessica contributes cash and Samantha will operate the business. How much income must Samantha recognize?

A partnership has $23,000 of depreciation expense and $25,000 of Section 179 expense.How are the depreciation and Section 179 expenses reported?

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 46 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

Exam 14: Partnership Taxation

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

Paris,a 60% partner in Omega Partnership,has a basis of $25,000 in her partnership interest.Paris receives a cash distribution of $24,000 at year-end.What is Paris's basis in her partnership interest at the end of the year?

Raul contributes the following assets to a partnership for a 50% interest: What is Raul's basis in his partnership interest?

A guaranteed payment is treated as:

Guaranteed payments are always determined with regard to partnership income.

A partner's share of recourse liabilities increases the partner's basis in his or her partnership interest.

Partner Spence had the following items reported on a partnership Schedule K-1: Spence had a basis in his partnership interest of $23,000 at the beginning of the year.What is Spence's basis in his partnership interest at the end of the year?

If Jake contributes land to a partnership with a basis of $12,000 and a FMV of $18,000,the partnership will have a basis in the asset of $12,000.

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?

Guaranteed payments are the only items that are reported both as a deduction for ordinary income and as a separately stated item.

Which of the following is reported as a separately stated item from a partnership?

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

All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.

If Casey's partnership basis is only $100,000 and Cherie's basis is $200,000,there is no way both Casey and Cherie can be equal partners at 50% each in the partnership.

Caroline,Jessica,and Samantha form a partnership.Caroline contributes a building,Jessica contributes cash and Samantha will operate the business. How much income must Samantha recognize?

A partnership has $23,000 of depreciation expense and $25,000 of Section 179 expense.How are the depreciation and Section 179 expenses reported?

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 46 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