Partnership Taxation MCQs

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At partnership inception, Black acquires a 50% interest in Decorators Partnership by contributing property with an adjusted basis of $250,000. Black...






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On June 1, 2013, Kelly received a 10% interest in Rock Co., a partnership, for services contributed to the partnership. Rocks net assets at that da...






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The holding period of property acquired by a partnership as a contribution to the contributing partners capital account






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The holding period of a partnership interest acquired in exchange for a contributed capital asset begins on the date






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The following information pertains to Carrs admission to the Smith & Jones partnership on July 1, 2012: Carrs contribution of capital: 800 share...






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On September 1, 2012, James Elton received a 25% capital interest in Bredbo Associates, a partnership, in return for services rendered plus a contri...






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Basic Partnership, a cash-basis calendar-year entity, began business on February 1, 2013. Basic incurred and paid the following during 2013: Filing...






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Thompsons basis in Starlight Partnership was $60,000 at the beginning of the year. Thompson materially participates in the partnerships business. ...






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In computing the ordinary income of a partnership, a deduction is allowed for






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Which of the following limitations will apply in determining a partners deduction for that partners share of partnership losses? At-risk . . . . ...






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Dunn and Shaw are partners who share profits and losses equally. In the computation of the partnerships 2012 book income of $100,000, guaranteed pa...






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The partnership of Martin & Clark sustained an ordinary loss of $84,000 in 2012. The partnership, as well as the two partners, are on a calendar-yea...






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The partnership of Felix and Oscar had the following items of income during the taxable year ended December 31, 2012. Income from operations $156,00...






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The partnership of Felix and Oscar had the following items of income during the taxable year ended December 31, 2012. Income from operations $156,00...






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A guaranteed payment by a partnership to a partner for services rendered, may include an agreement to pay I. A salary of $5,000 monthly without rega...






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Chris, a 25% partner in Vista partnership, received a $20,000 guaranteed payment in 2012 for deductible services rendered to the partnership. Guaran...






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On January 2, 2012, Arch and Bean contribute cash equally to form the JK Partnership. Arch and Bean share profits and losses in a ratio of 75% to 25...






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Guaranteed payments made by a partnership to partners for services rendered to the partnership, that are deductible business expenses under the Inte...






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The method used to depreciate partnership property is an election made by






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Under the Internal Revenue Code sections pertaining to partnerships, guaranteed payments are payments to partners for






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Dales distributive share of income from the calendar-year partnership of Dale & Eck was $50,000 in 2012. On December 15, 2012, Dale, who is a cash-...






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At December 31, 2011, Alan and Baker were equal partners in a partnership with net assets having a tax basis and fair market value of $100,000. On J...






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Gilroy, a calendar-year taxpayer, is a partner in the firm of Adams and Company which has a fiscal year ending June 30. The partnership agreement pr...






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On December 31, 2011, Edward Baker gave his son, Allan, a gift of a 50% interest in a partnership in which capital is a material income-producing fa...






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Flagg and Miles are each 50% partners in Decor Partnership. Each partner had a $200,000 tax basis in the partnership on January 1, 2012. Decors 201...






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Flagg and Miles are each 50% partners in Decor Partnership. Each partner had a $200,000 tax basis in the partnership on January 1, 2012. Decors 201...






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Peters has a one-third interest in the Spano Partnership. During 2012, Peters received a $16,000 guaranteed payment, which was deductible by the par...






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Dean is a 25% partner in Target Partnership. Deans tax basis in Target on January 1, 2012, was $20,000. At the end of 2012, Dean received a nonliqu...






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On January 4, 2012, Smith and White contributed $4,000 and $6,000 in cash, respectively, and formed the Macro General Partnership. The partnership a...






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Gray is a 50% partner in Fabco Partnership. Grays tax basis in Fabco on January 1, 2012, was $5,000. Fabco made no distributions to the partners du...






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On January 1, 2013, Kane was a 25% equal partner in Maze General Partnership, which had partnership liabilities of $300,000. On January 2, 2013, a n...






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Lee inherited a partnership interest from Dale during 2013. The adjusted basis of Dales partnership interest was $50,000, and its fair market value...






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Hall and Haig are equal partners in the firm of Arosa Associates. On January 1, 2012, each partners adjusted basis in Arosa was $40,000. During 201...






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Doris and Lydia are sisters and also are equal partners in the capital and profits of Agee & Nolan. The following information pertains to 300 shares...






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In March 2013, Lou Cole bought 100 shares of a listed stock for $10,000. In May 2013, Cole sold this stock for its fair market value of $16,000 to t...






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Kay Shea owns a 55% interest in the capital and profits of Dexter Communications, a partnership. In 2013, Kay sold an oriental lamp to Dexter for $5...






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Gladys Peel owns a 50% interest in the capital and profits of the partnership of Peel and Poe. On July 1, 2012, Peel bought land the partnership had...






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Under Section 444 of the Internal Revenue Code, certain partnerships can elect to use a tax year different from their required tax year. One of the ...






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Which one of the following statements regarding a partnerships tax year is correct?






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Without obtaining prior approval from the IRS, a newly formed partnership may adopt






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Irving Aster, Dennis Brill, and Robert Clark were partners who shared profits and losses equally. On February 28, 2012, Aster sold his interest to P...






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Currys sale of her partnership interest causes a partnership termination. The partnerships business and financial operations are continued by the ...






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Cobb, Danver, and Evans each owned a one-third interest in the capital and profits of their calendar-year partnership. On September 18, 2012, Cobb a...






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Partnership Abel, Benz, Clark & Day is in the real estate and insurance business. Abel owns a 40% interest in the capital and profits of the partner...






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Under which of the following circumstances is a partnership that is not an electing large partnership considered terminated for income tax purposes?...






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David Beck and Walter Crocker were equal partners in the calendar-year partnership of Beck & Crocker. On July 1, 2013, Beck died. Becks estate beca...






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On December 31, 2012, after receipt of his share of partnership income, Clark sold his interest in a limited partnership for $30,000 cash and relief...






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On April 1, 2012, George Hart, Jr. acquired a 25% interest in the Wilson, Hart, and Company partnership by gift from his father. The partnership int...






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On June 30, 2012, James Roe sold his interest in the calendar-year partnership of Roe & Doe for $30,000. Roes adjusted basis in Roe & Doe at June 3...






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Stone and Frazier decided to terminate the Woodwest Partnership as of December 31. On that date, Woodwests balance sheet was as follows: Cash $2,0...






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Currys adjusted basis in Vantage Partnership was $5,000 at the time he received a nonliquidating distribution of land. The land had an adjusted bas...






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Harts adjusted basis in Best Partnership was $9,000 at the time he received the following nonliquidating distribution of partnership property: Cas...






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Days adjusted basis in LMN Partnership interest is $50,000. During the year Day received a nonliquidating distribution of $25,000 cash plus land wi...






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The adjusted basis of Jodys partnership interest was $50,000 immediately before Jody received a current distribution of $20,000 cash and property w...






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The adjusted basis of Jodys partnership interest was $50,000 immediately before Jody received a current distribution of $20,000 cash and property w...






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On June 30, 2012, Berk, a calendar-year taxpayer, retired from his partnership. At that time, his capital account was $50,000 and his share of the p...






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The basis to a partner of property distributed in complete liquidation of the partners interest is the






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In 2008, Lisa Bara acquired a one-third interest in Dee Associates, a partnership. In 2013, when Lisas entire interest in the partnership was liqui...






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For tax purposes, a retiring partner who receives retirement payments ceases to be regarded as a partner a. On the last day of the taxable year in w...






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John Albin is a retired partner of Brill & Crum, a personal service partnership. Albin has not rendered any services to Brill & Crum since his retir...