Question 1

Match each of the following statements with the terms below that provide the best definition.
-General partnership

Accepted Answer

A) Organizational choice of many large accounting firms. 
B) Partner's percentage allocation of current operating income. 
C) Might affect any two partners' tax liabilities in different ways. 
D) Brokerage and registration fees incurred for promoting and marketing partnership interests. 
E) Transfer of asset to partnership followed by immediate distribution of cash to partner.
F)Must have at least one general and one limited partner.
G)All partners are jointly and severally liable for entity debts.
H)Theory treating the partner and partnership as separate economic units.
I)Partner's basis in partnership interest after tax-free contribution of asset to partnership.
J)Partnership's basis in asset after tax-free contribution of asset to partnership.
K)Owners are "members."
L)Theory treating the partnership as a collection of taxpayers joined in an agency relationship.
M)Allows many unincorporated entities to select their Federal tax status.
N)No correct match provided. 
A) Organizational choice of many large accounting firms. 
B) Partner's percentage allocation of current operating income. 
C) Might affect any two partners' tax liabilities in different ways. 
D) Brokerage and registration fees incurred for promoting and marketing partnership interests. 
E) Transfer of asset to partnership followed by immediate distribution of cash to partner.
F)Must have at least one general and one limited partner.
G)All partners are jointly and severally liable for entity debts.
H)Theory treating the partner and partnership as separate economic units.
I)Partner's basis in partnership interest after tax-free contribution of asset to partnership.
J)Partnership's basis in asset after tax-free contribution of asset to partnership.
K)Owners are "members."
L)Theory treating the partnership as a collection of taxpayers joined in an agency relationship.
M)Allows many unincorporated entities to select their Federal tax status.
N)No correct match provided.

Question 2

Carli contributes land to the newly formed CD Partnership in exchange for a 30% interest. The land has an adjusted basis and fair market value of $300,000 and is subject to a liability of $100,000, which the partnership assumes. None of this liability is repaid at year-end. At the end of the year, the partnership has trade accounts payable of $20,000. Assume all liabilities are allocated proportionately to the partners. Total partnership income for the year is $400,000. What is Carli's basis in her partnership interest at the end of the year?

Accepted Answer

Carli's basis in the

Question 3

Match each of the following statements with the terms below that provide the best definition.
-Precontribution gain

Accepted Answer

A) Adjusted basis of each partnership asset. 
B) Operating expenses incurred after entity is formed but before it begins doing business. 
C) Each partner's basis in the partnership. 
D) Reconciles book income to "taxable income." 
E) Tax accounting election made by partnership.
F)Tax accounting calculation made by partner.
G)Tax accounting election made by partner.
H)Does not include liabilities.
I)Designed to prevent excessive deferral of taxation of partnership income.
J)Amount that may be received by partner for performance of services for the partnership.
K)Computation that determines the way recourse debt is shared.
L)Will eventually be allocated to partner making tax-free property contribution to partnership.
M)Partner's share of partnership items.
N)Must generally be satisfied by any allocation to the partners.
O)Justification for a tax year other than the required taxable year.
P)No correct match is provided. 
A) Adjusted basis of each partnership asset. 
B) Operating expenses incurred after entity is formed but before it begins doing business. 
C) Each partner's basis in the partnership. 
D) Reconciles book income to "taxable income." 
E) Tax accounting election made by partnership.
F)Tax accounting calculation made by partner.
G)Tax accounting election made by partner.
H)Does not include liabilities.
I)Designed to prevent excessive deferral of taxation of partnership income.
J)Amount that may be received by partner for performance of services for the partnership.
K)Computation that determines the way recourse debt is shared.
L)Will eventually be allocated to partner making tax-free property contribution to partnership.
M)Partner's share of partnership items.
N)Must generally be satisfied by any allocation to the partners.
O)Justification for a tax year other than the required taxable year.
P)No correct match is provided.

Question 4

Which of the following statements is always correct regarding assets acquired by a newly formed partnership? If a partner contributes:

Accepted Answer

A) Depreciable property: the partnership treats the property as newly acquired depreciable property, and may claim a § 179 deduction. 
B) Unrealized (cash-basis) receivables: the partnership will report a capital gain when the receivable is collected. 
C) Inventory (in the partner's hands): the partnership reports ordinary income if the property is held as a capital asset and sold within five years of the contribution date. 
D) Land valued at less than its basis: the partnership reports a § 1231 loss if the property is sold at a loss. 
E) None of these statements is correct. 
A) Depreciable property: the partnership treats the property as newly acquired depreciable property, and may claim a § 179 deduction. 
B) Unrealized (cash-basis) receivables: the partnership will report a capital gain when the receivable is collected. 
C) Inventory (in the partner's hands): the partnership reports ordinary income if the property is held as a capital asset and sold within five years of the contribution date. 
D) Land valued at less than its basis: the partnership reports a § 1231 loss if the property is sold at a loss. 
E) None of these statements is correct.

Question 5

Match each of the following statements with the terms below that provide the best definition.
-Substituted

Accepted Answer

A) Organizational choice of many large accounting firms. 
B) Partner's percentage allocation of current operating income. 
C) Might affect any two partners' tax liabilities in different ways. 
D) Brokerage and registration fees incurred for promoting and marketing partnership interests. 
E) Transfer of asset to partnership followed by immediate distribution of cash to partner.
F)Must have at least one general and one limited partner.
G)All partners are jointly and severally liable for entity debts.
H)Theory treating the partner and partnership as separate economic units.
I)Partner's basis in partnership interest after tax-free contribution of asset to partnership.
J)Partnership's basis in asset after tax-free contribution of asset to partnership.
K)Owners are "members."
L)Theory treating the partnership as a collection of taxpayers joined in an agency relationship.
M)Allows many unincorporated entities to select their Federal tax status.
N)No correct match provided. 
A) Organizational choice of many large accounting firms. 
B) Partner's percentage allocation of current operating income. 
C) Might affect any two partners' tax liabilities in different ways. 
D) Brokerage and registration fees incurred for promoting and marketing partnership interests. 
E) Transfer of asset to partnership followed by immediate distribution of cash to partner.
F)Must have at least one general and one limited partner.
G)All partners are jointly and severally liable for entity debts.
H)Theory treating the partner and partnership as separate economic units.
I)Partner's basis in partnership interest after tax-free contribution of asset to partnership.
J)Partnership's basis in asset after tax-free contribution of asset to partnership.
K)Owners are "members."
L)Theory treating the partnership as a collection of taxpayers joined in an agency relationship.
M)Allows many unincorporated entities to select their Federal tax status.
N)No correct match provided.

Question 6

Match each of the following statements with the terms below that provide the best definition.
-Required taxable year

Accepted Answer

A) Adjusted basis of each partnership asset. 
B) Operating expenses incurred after entity is formed but before it begins doing business. 
C) Each partner's basis in the partnership. 
D) Reconciles book income to "taxable income." 
E) Tax accounting election made by partnership.
F)Tax accounting calculation made by partner.
G)Tax accounting election made by partner.
H)Does not include liabilities.
I)Designed to prevent excessive deferral of taxation of partnership income.
J)Amount that may be received by partner for performance of services for the partnership.
K)Computation that determines the way recourse debt is shared.
L)Will eventually be allocated to partner making tax-free property contribution to partnership.
M)Partner's share of partnership items.
N)Must generally be satisfied by any allocation to the partners.
O)Justification for a tax year other than the required taxable year.
P)No correct match is provided. 
A) Adjusted basis of each partnership asset. 
B) Operating expenses incurred after entity is formed but before it begins doing business. 
C) Each partner's basis in the partnership. 
D) Reconciles book income to "taxable income." 
E) Tax accounting election made by partnership.
F)Tax accounting calculation made by partner.
G)Tax accounting election made by partner.
H)Does not include liabilities.
I)Designed to prevent excessive deferral of taxation of partnership income.
J)Amount that may be received by partner for performance of services for the partnership.
K)Computation that determines the way recourse debt is shared.
L)Will eventually be allocated to partner making tax-free property contribution to partnership.
M)Partner's share of partnership items.
N)Must generally be satisfied by any allocation to the partners.
O)Justification for a tax year other than the required taxable year.
P)No correct match is provided.

Question 7

A partnership cannot use the cash method of accounting if one of the partners is a C corporation.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an election or calculation made by the partner rather than the partnership?

Accepted Answer

A) Calculation of a § 199 deduction amount. 
B) Whether to capitalize, amortize, or expense research and experimental costs. 
C) The partnership's overall accounting method. 
D) Whether to claim a § 179 deduction related to property acquired by the partnership. 
E) All of the above elections are made by the partnership. 
A) Calculation of a § 199 deduction amount. 
B) Whether to capitalize, amortize, or expense research and experimental costs. 
C) The partnership's overall accounting method. 
D) Whether to claim a § 179 deduction related to property acquired by the partnership. 
E) All of the above elections are made by the partnership.

Match each of the following statements with the terms below that provide the best definition. -General partnership

Match each of the following statements with the terms below that provide the best definition. -Precontribution gain

Which of the following statements is always correct regarding assets acquired by a newly formed partnership? If a partner contributes:

Match each of the following statements with the terms below that provide the best definition. -Substituted

Match each of the following statements with the terms below that provide the best definition. -Required taxable year

A partnership cannot use the cash method of accounting if one of the partners is a C corporation.

Which of the following is an election or calculation made by the partner rather than the partnership?

Understanding and Working With the Federal Tax Law

Corporations Introduction and Operating Rules

Corporations Special Situations

Corporations Organization and Capital Structure

Corporations Earnings Profits and Dividend Distributions

Corporations Redemptions and Liquidations

Corporations Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships Distributions Transfer of Interests and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 10: Partnerships Formation Operation and Basis

Match each of the following statements with the terms below that provide the best definition. -General partnership

Match each of the following statements with the terms below that provide the best definition. -Precontribution gain

Which of the following statements is always correct regarding assets acquired by a newly formed partnership? If a partner contributes:

Match each of the following statements with the terms below that provide the best definition. -Substituted

Match each of the following statements with the terms below that provide the best definition. -Required taxable year

A partnership cannot use the cash method of accounting if one of the partners is a C corporation.

Which of the following is an election or calculation made by the partner rather than the partnership?

Understanding and Working With the Federal Tax Law

Corporations Introduction and Operating Rules

Corporations Special Situations

Corporations Organization and Capital Structure

Corporations Earnings Profits and Dividend Distributions

Corporations Redemptions and Liquidations

Corporations Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships Distributions Transfer of Interests and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters