Question 1

Lacy contributes the following assets to a partnership for a 25% interest:   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 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

If Janelle's partnership basis was $5,000 and she received a distribution of land that had a basis of $10,000, the basis of the land in Janelle's hands would be $10,000.

Accepted Answer

A) True 
 B)False

Question 4

Partnership income and losses are divided into two components: ordinary items and separately stated items.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

Partnership income or loss and separately stated items are reported to the individual partners via Schedule K-1.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is reported as ordinary income or expense from a partnership?

Accepted Answer

A)  Depreciation expense. 
B)  Section 179 expense. 
C)  Gain on the sale of a Section 1231 asset. 
D) Dividend income. 
A)  Depreciation expense. 
B)  Section 179 expense. 
C)  Gain on the sale of a Section 1231 asset. 
D) Dividend income.

Question 8

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

Question 9

In 2014, Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000. In 2015, 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)  $0. 
B)  $10,000. 
C)  $16,000. 
D) $28,000. 
A)  $0. 
B)  $10,000. 
C)  $16,000. 
D) $28,000.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Cameron has a basis in his partnership interest of $5,000. Cameron's share of partnership income is $5,000. He also receives a cash distribution from the partnership of $13,000. What is his gain or loss as a result of the distribution?

Accepted Answer

A)  $13,000. 
B)  $5,000. 
C)  $3,000. 
D) $0. 
A)  $13,000. 
B)  $5,000. 
C)  $3,000. 
D) $0.

Question 13

Rich is a partner in RKW partnership. Rich owned 50% from January 1, 2015 to April 30, 2015, 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)  $75,000 ordinary income; $12,500 capital gain. 
B)  $100,172 ordinary income; $16,696 capital gain. 
C)  $112,500 ordinary income; $18,750 capital gain. 
D) $150,000 ordinary income; $25,000 capital gain. 
A)  $75,000 ordinary income; $12,500 capital gain. 
B)  $100,172 ordinary income; $16,696 capital gain. 
C)  $112,500 ordinary income; $18,750 capital gain. 
D) $150,000 ordinary income; $25,000 capital gain.

Question 14

The general rule regarding income and expense items of a partnership and their classification is:

Accepted Answer

A)  All income and expense items of a partnership are treated as ordinary income/expense items. 
B)  All income and expense items of a partnership that may be treated differently at the partner level must be "separately stated." 
C)  All income and expense items of a partnership are treated as separately stated items. 
D) All income and expense items of a partnership are treated as capital income or losses. 
A)  All income and expense items of a partnership are treated as ordinary income/expense items. 
B)  All income and expense items of a partnership that may be treated differently at the partner level must be "separately stated." 
C)  All income and expense items of a partnership are treated as separately stated items. 
D) All income and expense items of a partnership are treated as capital income or losses.

Lacy contributes the following assets to a partnership for a 25% interest: The land and the van have a basis to the partnership of:

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.

If Janelle's partnership basis was $5,000 and she received a distribution of land that had a basis of $10,000, the basis of the land in Janelle's hands would be $10,000.

Partnership income and losses are divided into two components: ordinary items and separately stated items.

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

Partnership income or loss and separately stated items are reported to the individual partners via Schedule K-1.

Which of the following is reported as ordinary income or expense from a partnership?

In 2014, Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000. In 2015, 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?

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

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

Cameron has a basis in his partnership interest of $5,000. Cameron's share of partnership income is $5,000. He also receives a cash distribution from the partnership of $13,000. What is his gain or loss as a result of the distribution?

The general rule regarding income and expense items of a partnership and their classification is:

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

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

Lacy contributes the following assets to a partnership for a 25% interest: The land and the van have a basis to the partnership of:

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.

If Janelle's partnership basis was $5,000 and she received a distribution of land that had a basis of $10,000, the basis of the land in Janelle's hands would be $10,000.

Partnership income and losses are divided into two components: ordinary items and separately stated items.

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

Partnership income or loss and separately stated items are reported to the individual partners via Schedule K-1.

Which of the following is reported as ordinary income or expense from a partnership?

In 2014, Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000. In 2015, 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?

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

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

Cameron has a basis in his partnership interest of $5,000. Cameron's share of partnership income is $5,000. He also receives a cash distribution from the partnership of $13,000. What is his gain or loss as a result of the distribution?

The general rule regarding income and expense items of a partnership and their classification is:

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

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