Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The sale of a partnership interest is similar to the sale of any capital asset and is reported by the partner on Schedule D of his or her individual tax return.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

On April 30 of the current year,Ashley contributes a building with a $155,000 basis and a $235,000 FMV in exchange for a partnership interest.She purchased the building eight years ago.
a.What is Ashley's basis in her partnership interest?
b.What is Ashley's holding period of her partnership interest?
c.What is the basis of the building in the hands of the partnership?
d.What is the holding period of the building in the hands of the partnership?
e.How will the partnership depreciate the building in the year of contribution?

Accepted Answer

^a.^The^same^as^her^basisⁱⁿ^the^building- ^$155,000. ^b.^The^partnership^interest^has^an^eight-year^holding^period- ^the^same^as^the^buildingⁱⁿ^thehands of the pa

Question 5

Rental income and expenses are treated as:

Accepted Answer

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

Question 6

In 2015,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2016,when the FMV of the land is $28,000,the partnership distributes the land to Shelia,another partner.What is the gain or loss recognized by Angel on the distribution to Shelia?

Accepted Answer

A) $28,000. 
B) $10,000. 
C) $0. 
D) $16,000. 
A) $28,000. 
B) $10,000. 
C) $0. 
D) $16,000.

Question 7

Section 179 expense is reported:

Accepted Answer

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

Question 8

Callie contributes the following assets to a partnership in exchange for a 30% partnership interest:
   What is Callie's beginning basis in her partnership interest?

Accepted Answer

The answer of Callie contributes the following assets to a...

Question 9

Typically,a partner does not recognize a gain when he or she receives a current distribution.

Accepted Answer

A) True 
 B)False

Question 10

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always:

Accepted Answer

A) The lesser of the asset's FMV or basis at the date of contribution. 
B) The basis of the asset at the date of contribution. 
C) $0. 
D) The FMV of the asset at the date of contribution. 
A) The lesser of the asset's FMV or basis at the date of contribution. 
B) The basis of the asset at the date of contribution. 
C) $0. 
D) The FMV of the asset at the date of contribution.

Question 11

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.

Accepted Answer

A) True 
 B)False

Question 12

When dealing with the liquidation of a partnership interest,a partner will:

Accepted Answer

A) Only recognize a loss when property,inventory,and/or receivables are distributed. 
B) Only recognize a loss when money,inventory,and/or receivables are distributed. 
C) Never recognize a loss. 
D) None of these. 
A) Only recognize a loss when property,inventory,and/or receivables are distributed. 
B) Only recognize a loss when money,inventory,and/or receivables are distributed. 
C) Never recognize a loss. 
D) None of these.

Question 13

A partner never recognizes a gain or loss on the formation of a partnership.

Accepted Answer

A) True 
 B)False

Question 14

Bethany contributes a building to a partnership with a basis of $120,000 and a FMV of $200,000.Bethany's basis in her partnership interest would:

Accepted Answer

A) Increase by $120,000. 
B) Increase by $200,000. 
C) Increase by $80,000. 
D) Not increase at all. 
A) Increase by $120,000. 
B) Increase by $200,000. 
C) Increase by $80,000. 
D) Not increase at all.

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

The sale of a partnership interest is similar to the sale of any capital asset and is reported by the partner on Schedule D of his or her individual tax return.

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

Rental income and expenses are treated as:

In 2015,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2016,when the FMV of the land is $28,000,the partnership distributes the land to Shelia,another partner.What is the gain or loss recognized by Angel on the distribution to Shelia?

Section 179 expense is reported:

Callie contributes the following assets to a partnership in exchange for a 30% partnership interest: What is Callie's beginning basis in her partnership interest?

Typically,a partner does not recognize a gain when he or she receives a current distribution.

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always:

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.

When dealing with the liquidation of a partnership interest,a partner will:

A partner never recognizes a gain or loss on the formation of a partnership.

Bethany contributes a building to a partnership with a basis of $120,000 and a FMV of $200,000.Bethany's basis in her partnership interest would:

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

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Exam 14: Partnership Taxation

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

The sale of a partnership interest is similar to the sale of any capital asset and is reported by the partner on Schedule D of his or her individual tax return.

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

Rental income and expenses are treated as:

In 2015,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2016,when the FMV of the land is $28,000,the partnership distributes the land to Shelia,another partner.What is the gain or loss recognized by Angel on the distribution to Shelia?

Section 179 expense is reported:

Callie contributes the following assets to a partnership in exchange for a 30% partnership interest: What is Callie's beginning basis in her partnership interest?

Typically,a partner does not recognize a gain when he or she receives a current distribution.

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always:

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.

When dealing with the liquidation of a partnership interest,a partner will:

A partner never recognizes a gain or loss on the formation of a partnership.

Bethany contributes a building to a partnership with a basis of $120,000 and a FMV of $200,000.Bethany's basis in her partnership interest would:

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