Question 1

Which of the following items will affect a partner's tax basis?

Accepted Answer

A) Share of ordinary business income (loss). 
B) Share of nonrecourse debt. 
C) Share of recourse debt. 
D) Share of qualified nonrecourse debt. 
E) All of these choices will affect a partner's tax basis. 
A) Share of ordinary business income (loss). 
B) Share of nonrecourse debt. 
C) Share of recourse debt. 
D) Share of qualified nonrecourse debt. 
E) All of these choices will affect a partner's tax basis.

Question 2

Partnership tax rules incorporate both the entity and aggregate approaches.

Accepted Answer

A) True 
 B)False

Question 3

What is the difference between a partner's tax basis and at-risk amount?

Accepted Answer

A partner's tax basis is adjusted to inc

Question 4

Does adjusting a partner's basis for tax-exempt income prevent double taxation?

Accepted Answer

A) Yes,if this basis adjustment is not made,the partner will be taxed once when the income is allocated to him and a second time when he sells his partnership interest. 
B) Yes,if this basis adjustment is not made,the partner will be taxed on the tax-exempt income when he sells his partnership interest and again if the tax-exempt income exceeds $10,000. 
C) No,making this adjustment to the partner's basis prevents the tax-exempt income from being converted to taxable income. 
D) No,the partner should not adjust his tax basis by his share of tax-exempt income. 
A) Yes,if this basis adjustment is not made,the partner will be taxed once when the income is allocated to him and a second time when he sells his partnership interest. 
B) Yes,if this basis adjustment is not made,the partner will be taxed on the tax-exempt income when he sells his partnership interest and again if the tax-exempt income exceeds $10,000. 
C) No,making this adjustment to the partner's basis prevents the tax-exempt income from being converted to taxable income. 
D) No,the partner should not adjust his tax basis by his share of tax-exempt income.

Question 5

Partners adjust their outside basis by adding nondeductible expenses and subtracting any tax-exempt income to avoid being double taxed.

Accepted Answer

A) True 
 B)False

Question 6

A partnership may use the cash method despite having a corporate partner when the partnership's average gross receipts for the prior three taxable years don't exceed ________.

Accepted Answer

A) $5,000,000. 
B) $1,000,000. 
C) $25,000,000. 
D) Partnerships may never use the cash method if they have corporate partners. 
A) $5,000,000. 
B) $1,000,000. 
C) $25,000,000. 
D) Partnerships may never use the cash method if they have corporate partners.

Which of the following items will affect a partner's tax basis?

Partnership tax rules incorporate both the entity and aggregate approaches.

What is the difference between a partner's tax basis and at-risk amount?

Does adjusting a partner's basis for tax-exempt income prevent double taxation?

Partners adjust their outside basis by adding nondeductible expenses and subtracting any tax-exempt income to avoid being double taxed.

A partnership may use the cash method despite having a corporate partner when the partnership's average gross receipts for the prior three taxable years don't exceed ________.

An Introduction to Tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 20: Forming and Operating Partnerships

Which of the following items will affect a partner's tax basis?

Partnership tax rules incorporate both the entity and aggregate approaches.

What is the difference between a partner's tax basis and at-risk amount?

Does adjusting a partner's basis for tax-exempt income prevent double taxation?

Partners adjust their outside basis by adding nondeductible expenses and subtracting any tax-exempt income to avoid being double taxed.

A partnership may use the cash method despite having a corporate partner when the partnership's average gross receipts for the prior three taxable years don't exceed ________.

An Introduction to Tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters