Forming And Operating Partnerships

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Business Income,Deductions,and Accounting Methods
Property Acquisition and Cost Recovery
Property Dispositions
Entities Overview
Corporate Operations
Accounting for Income Taxes
Corporate Taxation: Nonliquidating Distributions
Corporate Formation,Neorganization,and Liquidation
Forming and Operating Partnerships
Dispositions of Partnership Interests and Partnership Distributions
S Corporations
State and Local Taxes
The Ustaxation of Multinational Transactions
Transfer Taxes and Wealth Planning

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Question 1

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Income earned by flow-through entities is usually taxed only once at the entity level.

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Question 2

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True/False

Partnerships tax rules incorporate both the entity and aggregate approaches.

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Question 3

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True/False

The term "outside basis" refers to the partnership's basis in its assets; whereas,the term "inside basis" refers an individual partner's basis in her partnership interest.

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Question 4

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True/False

A partnership can elect to amortize organization and startup costs; however,syndication costs are not deductible.

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Question 5

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True/False

Nonrecourse debt is generally allocated according to the profit-sharing ratios of the partnership.

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Question 6

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Partners must generally treat the value of profits interests they receive in exchange for services as ordinary income.

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Question 7

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A purchased partnership interest has a holding period beginning on the date of purchase regardless of the type of property held by the partnership.

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Question 8

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Tax elections are rarely made at the partnership level.

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Question 9

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The least aggregate deferral test uses the profit percentage of each partner to determine the minimum amount of tax deferral for the partner group as a whole in determining the permissible tax year-end of a partnership.

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Question 10

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A partnership with a C corporation partner must always use the accrual method as its accounting method.

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Question 11

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The character of each separately-stated item is determined at the partner level.

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Question 12

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Guaranteed payments are included in the calculation of a partnership's ordinary business income (loss)and are also treated as separately-stated items.

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Question 13

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A general partner's share of ordinary business income is similar to investment income; thus,a general partner only includes their guaranteed payments as self-employment income.

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Question 14

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Partnerships can use special allocations to shift built-in gains and built-in losses on contributed property from a partner who contributed the property to other partners.

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Question 15

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For partnership tax years ending after December 31,2015,partnerships can request up to a six-month extension by filing IRS Form 7004 prior to the original due date of the partnership return.

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Question 16

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A partner's outside basis must first be decreased by any negative basis adjustments and then increased by any positive basis adjustments.

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Question 17

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Actual or deemed cash distributions in excess of a partner's outside basis are generally taxable as capital gains.

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Question 18

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Adjustments to a partner's outside basis are made annually to prevent double taxation on the sale of a partnership interest or at the time of a partnership distribution.

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Question 19

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

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Question 20

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An additional allocation of partnership debt or relief of partnership debt is considered to be a deemed cash contribution or cash distribution respectively.

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