Deck 10: Partnerships: Formation, Operations, and Basis

Question 1

An example of the aggregate concept of partnership taxation is that the partnership makes elections related to depreciation, tax credit calculations except the foreign tax credit), and whether to claim a § 179 deduction.

Answer 1

False

Question 2

Ken and Lars formed the equal KL Partnership during the current year; Ken contributes $100,000 in cash and Lars contributes land basis of $60,000, fair market value of $40,000) and equipment basis of $0, fair market value of
$60,000). Lars recognizes a $40,000 gain on the contribution and his basis in his partnership interest is $100,000.

Answer 2

False

Question 3

The inside basis is defined as a partner's basis in the partnership interest.

Answer 3

False

Question 4

An example of the aggregate concept underlying partnership taxation is the fact that the partners rather than the partnership) pay tax on partnership income.

Question 5

A limited partnership LP) offers all partners protection from claims by the LP's creditors.

Question 6

George received a fully vested 10% interest in partnership capital and a 20% interest in future partnership profits in exchange for services rendered to the GHP, LLC not a publicly traded partnership interest). The future profits of the partnership are subject to normal operating risks. George will report ordinary income equal to the fair market value of the profits interest, but the capital interest will not be currently taxed to him.

Question 7

In a limited liability partnership, all members may participate in management and have personal liability for entity debts except for malpractice committed by the other partners.

Question 8

The taxable income of a partnership flows through to the partners, who report the income on their tax returns.

Question 9

In a limited liability company, all members are protected from all debts of the LLC unless they personally guaranteed the debt.

Question 10

A partnership is an association formed by two or more taxpayers which may be any type of entity) to carry on a trade or business.

Question 11

A partner's profit-sharing, loss-sharing, and capital-sharing ownership percentages are the same.

Question 12

Section 721 provides that no gain or loss is recognized on a contribution of property to a partnership in exchange for an interest in the partnership. An exception might apply if the taxpayer receives a cash distribution from the partnership soon after the property contribution is made.

Question 13

In a limited liability company, all members may participate in management the operating agreement cannot limit participation), and all entity debts are treated as nonrecourse liabilities for purposes of allocating the LLC's liabilities to basis.

Question 14

Morgan and Kristen formed an equal partnership on August 1 of the current year. Morgan contributed $60,000 cash and land with a basis of $18,000 and a fair market value of $40,000. Kristen contributed equipment with a basis of
$42,000 and a value of $100,000. Kristen and Morgan both have a basis of $100,000 in their partnership interests.

Question 15

The partnership agreement might provide, for example, that the first $40,000 of ordinary income is allocated to
Partner A. Allocating income in this manner is an example of a separately stated item.

Question 16

A partnership reports each partner's share of income to the partner on a Form 1099-MISC.

Question 17

Section 721 provides that, in general, no gain or loss is recognized by the partnership or the partner on contribution of appreciated or depreciated property to a partnership in exchange for an interest in the partnership.

Question 18

Laura is a real estate developer and owns property that is treated as inventory not a capital asset) in her business.
She contributes a parcel of this land basis of $15,000) to a partnership, also to be held as inventory. The fair market value of the property is $12,000 at the contribution date. After three years, the partnership sells the land for $10,000. The partnership will recognize a $5,000 ordinary loss on sale of the property.

Question 19

The primary purpose of the partnership agreement is to document the various tax elections made by the partners regarding items such as depreciation methods, treatment of research and experimental costs, and the § 754 election.

Question 20

When Kevin and Marshall formed the equal KM LLC, the fair market values of their interests were each $100,000.
Kevin contributed $60,000 cash, equipment with a basis of $0 and a fair market value of $10,000, and a small parcel of land in which he had a basis of $50,000 and that was valued at $30,000. Marshall contributed receivable that was valued at $100,000 and in which his basis was $0. Kevin has a basis in his partnership interest of $110,000 and Marshall's basis is $0.

Question 21

Greene Partnership had average annual gross receipts for the past three years of $24.8 million and never has reported average annual gross receipts above $25 million. One of the partners is Jackson, Inc., a C corporation. Because Greene meets the average annual gross receipts test, it may use the cash method of accounting even though it has a partner that is a C corporation.

Question 22

If a partnership properly makes an election for treatment of a specific tax item, the partner is bound by that treatment.

Question 23

The amount of a partnership's income and loss from operating activities is combined with separately stated income and expenses to determine the partnership's equivalent of taxable income. This amount is reconciled to book income on the partnership's Schedule M-1 or Schedule M-3.

Question 24

MNO Partnership has three equal partners. Moon, Inc. and Neptune, Inc. each have fiscal years ending March 31.
Omega uses the calendar year. MNO's required taxable year-end is March 31 under the majority partner rule.

Question 25

DDP Partnership reported gross income from operations of $125,000, a long-term capital gain of $5,000, a short-term capital loss of $2,000, and a charitable contribution of $5,000. On its Schedule K, the partnership reports ordinary business income of $120,000, a long-term capital gain of $5,000, and a short-term capital loss of $2,000.

Question 26

Blaine contributes property valued at $50,000 basis of $40,000) in exchange for a 25% interest in the BIKE Partnership. If the property is later sold for $70,000, gain of $15,000 will be allocated to Blaine.

Question 27

A partnership must provide any information to the partners that they would need to calculate deductions not permitted at the partnership level, such as for oil and gas depletion or the corporate dividends received deduction.

Question 28

Seven years ago, Paul purchased residential rental estate that he has been depreciating as MACRS property over
27.5 years. This year, when his adjusted basis in the property was $250,000, he transferred the property to the newly formed PLA LLC in exchange for a one-third interest in it. PLA incurred $10,000 of transfer taxes and fees related to the property. It must treat the $260,000 basis in the property, fees, and expenses, as new MACRS property depreciable over 27.5 years.

Question 29

Nicholas, a one-third partner, received a guaranteed payment in the current year of $50,000. Partnership income before consideration of the guaranteed payment was $20,000. Assuming that no loss limitation rules apply, Nicholas reports a $10,000 ordinary loss from partnership operations and the $50,000 guaranteed payment as ordinary income.

Question 30

Items that are not required to be shown on the partners' Schedules K-1 include AMT adjustments and preferences and taxes paid to foreign countries, because AMT and the foreign tax credit are calculated by the partnership.

Question 31

To meet the substantial economic effect tests, a partnership's allocations of income and deductions to the partners are required to be proportionate to the partners' percentage ownership of partnership capital.

Question 32

JLK Partnership incurred $6,000 of organizational costs and $50,000 of startup costs. JKL may deduct $5,000 each of organizational and startup costs, and the remaining costs $1,000 of organizational costs and $45,000 of startup costs) may be amortized over 60 months.

Question 33

PaulCo, DavidCo, and Sean form a partnership with cash contributions of $80,000, $50,000 and $30,000, respectively, and agree to share profits and losses in the ratio of their original cash contributions. PaulCo uses a January 31 fiscal year-end, whereas DavidCo and Sean use a November 30 and December 31 year-end, respectively. The partnership must use the least aggregate deferral method to determine its year-end.

Question 34

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

Question 35

BRW Partnership reported gross income from operations of $60,000, interest income of $3,000, utilities expense of
$20,000, and a charitable contribution of $6,000. On its Schedule K, the partnership reports ordinary business income of $40,000, separately stated interest income $3,000), and charitable contributions $6,000).

Question 36

The BMR LLC conducted activities that were eligible for a $20,000 credit for increasing research activities. In addition, the LLC paid foreign taxes of $1,200. On the partners' Schedules K-1, BMR will allocate the $20,000 credit, and it will provide the necessary information so the partners can calculate the foreign tax credit if they so choose.

Question 37

The RGBY LLC operating agreement provides that 50% of depreciation expense is allocated to Red, and all remaining income including the remaining 50% of depreciation) is allocated equally among the four partners. Before guaranteed payments and depreciation, RGBY's net income is $120,000 for the year. RGBY's depreciation expense is $20,000, and it paid a guaranteed payment to Yellow of $8,000. Assume that all allocations and payments meet the substantial economic effect rules. After all deductions and special allocations are taken into account, Red is allocated a net deduction of $15,500 from the partnership.

Question 38

Syndication costs arise when partnership interests are being marketed to investors. These costs cannot be amortized or deducted on income tax returns.

Question 39

Tom and William are equal partners in the TW Partnership. Just before TW liquidated, Tom's capital account balance was $50,000 and William's capital account balance was $30,000. To meet the substantial economic effect requirements, any liquidating cash distribution must be allocated in proportion to those ending capital account balances.

Question 40

ABC, LLC is equally owned by three corporations. Two corporations have June 30 fiscal year-ends and the third is a calendar year taxpayer. ABC will use the least aggregate deferral method to determine its taxable year-end.

Question 41

Which one of the following statements regarding partnership taxation is incorrect?

A) A partnership is a tax-paying entity for Federal income tax purposes.
B) Partnership income is comprised of ordinary partnership income or loss and separately stated items.
C) A partnership is required to file a return with the IRS.
D) A partner's profit-sharing percentage may differ from the partner's loss-sharing percentage.
E) All of these are correct.

Question 42

Micah's beginning capital account on his Schedule K-1 is $60,000. During the year, he is allocated $20,000 of partnership income, $8,000 of nondeductible expenses, and a $12,000 share of tax-exempt income. His Schedule K-
1s show allocations of nonrecourse debt of $20,000 last year) and $30,000 this year). Micah's ending capital account is $94,000.

Question 43

Maria owns a 60% interest in the KLM Partnership. Four years ago, her father gave her a parcel of land. The gift basis of the land to Maria is $60,000. In the current year, Maria had still not figured out how to use the land for her own personal or business use; consequently, she sold it to the partnership for $50,000. The partnership immediately started using the land as a parking lot for its employees. Maria may recognize her $10,000 loss on the sale.

Question 44

Gina is a single taxpayer and an active partner in the GMA LLC. Gina's Schedule K-1 reflects a $20,000 ordinary income share, $2,000 of interest income, and a $10,000 guaranteed payment for services. Gina's self-employment income from other sources and modified adjusted gross income is about $300,000. With respect to the income from the LLC, Gina is subject to the 0.9% additional Medicare tax on $30,000 and the 3.8% net investment income tax of
$2,000.

Question 45

Belinda owns a 30% profit and loss interest in the BOW LLC, and her basis in the interest is $30,000 excluding her share of the LLC's liabilities. Belinda guarantees a $40,000 LLC debt. Remaining liabilities not guaranteed by any of the LLC members) are $100,000. Belinda's basis in the LLC is $100,000.

Question 46

Emma's basis in her BBDE LLC interest is $60,000 at the beginning of the tax year. Her allocable share of LLC items are as follows: $20,000 of ordinary income, $2,000 tax-exempt interest income, and a $6,000 long-term capital gain. In addition, the LLC distributed $12,000 of cash to Emma during the year. Assuming that the LLC had no liabilities at the beginning or the end of the year, Emma's ending basis in her LLC interest is $76,000.

Question 47

The total tax burden on entity income is greater for a partner in a partnership up to 37% for an individual partner) than on a shareholder in a corporation 21% for an individual shareholder), so partnerships are used only in special situations.

Question 48

One of the disadvantages of the partnership form is that the partner's share of the partnership's taxable income is taxed to the partner even if it is not distributed.

Question 49

The sum of the partners' ending basis amounts equals the partners' ending capital account balances. These amounts are shown on the partnership's Schedule K.

Question 50

Steve's basis in his SAW Partnership interest is $200,000 including all adjustments at the beginning of the tax year, .
His allocable share of partnership items is: $120,000) of ordinary loss, $6,000 tax-exempt interest income, and a
$14,000 long-term capital gain. In addition, during the year, the LLC distributed $20,000 of cash to Steve. Also during the year, Steve's share of partnership debt increased by $10,000. Steve's ending basis in his LLC interest is $80,000.

Question 51

Which one of the following statements is true regarding a partner's personal liability for partnership assets?

A) LLC members can never be liable for entity debts.
B) In a limited partnership, all partners have limited liability for partnership debts.
C) In a limited liability partnership, a partner might be subject to liability for other partners' malpractice.
D) In a general partnership, all partners are liable for entity debts.
E) None of these statements is true.

Question 52

Julie and Kate form an equal partnership during the current year. Julie contributes cash of $200,000, and Kate contributes property adjusted basis of $90,000, fair market value of $260,000) subject to a nonrecourse liability of
$60,000. As a result of these transactions, Kate has a basis in her partnership interest of $120,000.

Question 53

Harry's basis in his partnership interest was $10,000 at the beginning of the tax year. For the year, his share of the partnership's loss was $8,000, and he also received a distribution of $4,000. Harry can deduct an $8,000 loss, and he recognizes a gain of $2,000 on the distribution of cash in excess of his remaining basis.

Question 54

Debt of a limited liability company is allocated among its members using the nonrecourse debt allocation rules unless an LLC member has personally guaranteed the debt.

Question 55

Ashley purchased her partnership interest from Lindsey on the first day of the current year for $40,000 cash. Ashley received a $10,000 cash distribution from the partnership during the year, and her share of partnership income is
$15,000. Her share of partnership liabilities on the last day of the partnership year is $20,000. Ashley's outside basis for her partnership interest at the end of the year is $45,000.

Question 56

The qualified business income deduction is calculated at the partner level. The partnership reports information the partner needs to calculate the deduction, such as W-2 wages and the unadjusted basis of the partnership's depreciable property.

Question 57

Which of the following entity owners cannot participate in the management of an entity?

A) A general partner in a general partnership.
B) A member of a limited liability company.
C) A partner in a limited liability partnership.
D) A limited partner in a limited partnership.

Question 58

Which of the following is a correct definition of a concept related to partnership taxation?

A) The aggregate concept treats partners and partnerships as separate units and gives the partnership its own tax personality.
B) A partner's capital-sharing ratio is defined as the percentage of partnership assets capital) that would be allocated to the partner upon liquidation of the partnership.
C) The partnership's outside basis is defined as the sum of each partner's capital account balance.
D) A special allocation is defined as an amount that could differently affect the tax liabilities of two or more partners.
E) All of these.

Question 59

William is a general partner in the WST partnership. During the current year, he receives a guaranteed payment of
$10,000 for services he provides to the partnership, and his distributive share of partnership income is $30,000. William is required to pay self-employment tax on the $10,000 guaranteed payment but not on his distributive share of partnership income.

Question 60

If a partnership allocates losses to the partners, the partners first applies the passive loss limitations, then the basis limitation, and finally the at-risk limitations. If all three hurdles are met, a partner may deduct the loss.

Question 61

SQRLY LLC has about 25 LLC members. SwanCo 30% owner) and QuinnCo 16% owner both have June 30 tax year-ends. Royce, Inc.; Larry, Inc.; and Yolanda, Inc. each own 4% 12% total) and have September 30 taxable year-ends. Each of the other LLC members 42% total) owns interests of 4% or less and use the calendar year December 31). Which of the following statements is true regarding the LLC's required taxable year end?

A) The taxable year is determined under the least aggregate deferral rule.
B) The taxable year is determined under the majority interest rule because a majority of members have the same year-end.
C) The taxable year is determined under the principal partner rule because both SwanCo and QuinnCo have the same taxable year.
D) The taxable year ends on December 31 because more LLC members use a calendar year than any other year.
E) There is no required taxable year because there are more than 20 members.

Question 62

Which one of the following is an example of a special allocation of partnership income?

A) The partnership's capital gains and losses are shown separately on Schedule K-1.
B) Distributions from the partnership to the partner are shown on Schedule K-1 line 20.
C) The partnership agreement provides that a partner will report all charitable contributions rather than his 20% distributive share.
D) The Schedule K-1 reports each partner's share of the information they need to calculate the § 199A qualified business income) deduction.

Question 63

In the current year, the POD Partnership received revenues of $200,000 and paid the following amounts: $50,000 in rent and utilities and $20,000 as a distribution to partner Olivia. In addition, the partnership earned $6,000 of long- term capital gains during the year. Partner Donald owns a 50% interest in the partnership. How much income must Donald report for the tax year?

A) $68,000 ordinary income.
B) $78,000 ordinary income.
C) $65,000 ordinary income; $3,000 of long-term capital gains.
D) $75,000 ordinary income; $3,000 of long-term capital gains.

Question 64

Fern, Inc., Ivy, Inc., and Jeremy formed a general partnership. Fern owns a 50% interest, and Ivy and Jeremy both own 25% interests. Fern, Inc. files its tax return on an October 31 year-end; Ivy, Inc., files with a May 31 year-end, and Jeremy is a calendar year taxpayer. Which of the following statements is true regarding the taxable year the partnership can choose?

A) The partnership must choose the calendar year because it has no principal partners.
B) The partnership must choose an October year-end because Fern, Inc., is a principal partner.
C) The partnership can request permission from the IRS to use a January 31 fiscal year under § 444.
D) The partnership must use the least aggregate deferral method to determine its required taxable year.

Question 65

Kristie is a 30% partner in the KKM Partnership. During the current year, KKM reported gross receipts of $280,000 and a charitable contribution of $30,000. The partnership paid office expenses of $80,000. In addition, KKM distributed $20,000 each to partners Kaylyn and Megan, and paid partner Kaylyn $20,000 for administrative services. Kristie reports the following income from KKM during the current tax year.

A) $54,000 ordinary income; $9,000 charitable contribution.
B) $60,000 ordinary income; $9,000 charitable contribution.
C) $33,000 ordinary income.
D) $54,000 ordinary income.

Question 66

Xena and Xavier form the XX LLC. Xena contributes cash of $20,000, land basis = $40,000; fair market value = $25,000), equipment basis = $0; fair market value = $35,000), and inventory basis = $30,000; fair market value =
$40,000). Xavier contributed $120,000 of cash. How much is the partnership's basis in the land, equipment, and inventory, and how much is Xena's basis in the partnership interest?

A) $25,000 land, $0 equipment, $30,000 inventory; $55,000 partnership interest.
B) $40,000 land, $0 equipment, $30,000 inventory; $90,000 partnership interest.
C) $25,000 land, $35,000 equipment, $30,000 inventory; $105,000 partnership interest.
D) $40,000 land, $35,000 equipment, $40,000 inventory; $135,000 partnership interest.

Question 67

Tim, Al, and Pat contributed assets to form the equal TAP Partnership. Tim contributed cash of $40,000 and land with a basis of $80,000 fair market value of $60,000). Al contributed cash of $60,000 and land with a basis of $50,000 fair market value of $40,000). Pat contributed cash of $60,000 and a fully depreciated property $0 basis)
Valued at $40,000. Which of the following tax treatments is not correct?

A) Tim's basis in his partnership interest is $120,000.
B) Al realizes and recognizes a loss of $10,000.
C) Pat realizes a gain of $40,000 but recognizes $0 gain.
D) TAP has a basis of $80,000, $50,000, and $0 in the land and property excluding cash) contributed by Tim, Al, and Pat, respectively.
E) All of these are correct.

Question 68

DIP LLC reports ordinary income before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments of $20,000 to partner Percy. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character?

A) $24,000 ordinary income.
B) $24,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment.
C) $25,600 ordinary income, $8,000 guaranteed payment
D) $32,000 ordinary income, $1,600 interest income.
E) $32,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment.

Question 69

On January 1 of the current year, Anna and Jason form an equal partnership. Anna contributes $50,000 cash and a parcel of land adjusted basis of $200,000; fair market value of $150,000) in exchange for her interest in the partnership. Jason contributes property adjusted basis of $180,000; fair market value of $200,000) in exchange for his partnership interest. Which of the following statements is true concerning the income tax results of this partnership formation?

A) Jason recognizes a $20,000 gain on his property transfer.
B) Jason has a $200,000 tax basis for his partnership interest.
C) Anna has a $250,000 tax basis for her partnership interest.
D) Anna realizes and recognizes a $50,000 loss.
E) The partnership has a $150,000 adjusted basis in the land contributed by Anna.

Question 70

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

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) All of these statements are always true.

Question 71

Which of the following is not a requirement of the substantial economic effect test?

A) Income, gains, losses, and deductions must be allocated to the partners in accordance with their capital contributions.
B) An allocation of income must increase the partner's capital account balance, and an allocation of deduction must decrease the partner's capital account balance.
C) A partner with a negative capital account balance must restore that capital account, generally by contributing cash to the partnership.
D) On liquidation of the partner's interest in the partnership, the partner must receive assets that have a fair market value equal to that partner's positive) capital account balance.
E) All of these are requirements of the substantial economic effect test.

Question 72

The partner rather than the partnership) will make which of the following elections?

A) To claim straight-line depreciation.
B) To claim a credit or deduction for foreign taxes paid.
C) To claim a low-income housing credit.
D) To claim a § 179 deduction for certain property placed in service during the year.
E) All of these elections.

Question 73

Tara and Robert formed the TR Partnership four years ago. Because they decided the company needed some expertise in multimedia presentations, they offered Katie a one-third interest in partnership capital if she would come to work for the partnership. On July 1 of the current year, the unrestricted partnership interest fair market value of $25,000) was transferred to Katie. How should Katie treat the receipt of the partnership interest in the current year?

A) Nontaxable.
B) Carried interest.
C) $25,000 ordinary income.
D) $25,000 long-term capital gain.
E) $25,000 short-term capital gain.

Question 74

ABC LLC reported the following items on the LLC's Schedule K: ordinary income, $100,000; interest income, $3,000; long-term capital loss, $4,000); charitable contributions, $1,000; AMT depreciation adjustment, $10,000; and cash distributions to partners, $50,000. How much will ABC show as net income loss) on its Analysis of Income Loss)?

A) $68,000
B) $78,000
C) $95,000
D) $98,000
E) $102,000

Question 75

ACME Partnership has had the following gross receipts since its formation: $21.8 million in 2019, $24.6 million in 2020, $28.8 million in 2021, $23 million in 2022, and $32 million in 2023. ACME is not a tax shelter. Partner Meile, Inc. is a C corporation. In which tax years 2019 to 2023) must ACME use the accrual method?

A) 2019 and all following years, because it has a partner that is a C corporation.
B) 2021 to 2023, because gross receipts are more than $25 million in 2021.
C) 2022 and 2023, because average annual gross receipts are more than $25 million in 2021.
D) 2021 and 2023 because those are the only years in which gross receipts exceeded $25 million.
E) ACME can always use the cash method because it is not a tax shelter.

Question 76

A partnership will take a carryover basis in an asset it acquires when:

A) The partnership acquires the asset through a § 1031 like-kind exchange.
B) A partner owning 25% of partnership capital and profits sells the asset to the partnership.
C) The partnership leases the asset from a partner on a one-year lease.
D) The partnership acquires the asset from a partner as a contribution to partnership capital under § 721a).
E) None of these; the partnership always takes a substituted basis in the assets it receives.

Question 77

Concerning a partnership's Form 1065, which of the following statements is not true?

A) The partnership reconciles its "Income Loss) per Books" with "Income Loss) per Return" on Schedule M-1 or M-3.
B) The partnership balance sheet on Schedule L is generally presented on a financial book) basis.
C) All taxable/deductible partnership income and expense items are reported on Form 1065, page 1.
D) The partnership's equivalent of taxable income is reported in the "Analysis of Income Loss)."
E) The partnership deducts its allowable business interest expense on Form 1065, page 1, and allocates any excess to the partners for carryover.

Question 78

Which of the following statements is always true regarding accounting methods available to a partnership?

A) If a partnership is a tax shelter, it can use the cash method of accounting.
B) If a nontax-shelter partnership had average annual gross receipts of less than $25 million in for the last three tax years, it can use the cash method.
C) If a partnership has a partner that is a personal service corporation, it cannot use the cash method.
D) If a partnership has a partner that is a C corporation, it cannot use the cash method.
E) All of these statements are always true.

Question 79

Which of the following would be currently taxable as ordinary income to the service partner if received in exchange for services performed for the partnership? In all cases, assume that the interest is not sold within two years after the time it is granted to the service partner.)

A) A 10% interest in the capital of the partnership that will vest if the partner remains in the partnership for three years.
B) A 20% interest in the future profits of the partnership received in exchange for future services to be performed for the partnership.
C) A 25% interest in the capital of the partnership when there are no restrictions on transferability of the interest.
D) A 30% interest in the capital of the partnership when the partner contributes intangible property with a $0 basis that the partner developed.
E) All of these.

Question 80

Which of the following is not shown on the partnership's Schedule K of Form 1065?

A) The partnership's self-employment income.
B) The partnership's separately stated income and deductions.
C) The partnership's tax preference and adjustment items.
D) The partnership's net operating loss carryforward.
E) The partnership's investment portfolio) interest expense.