CCH FederalTaxation ComprehensiveTopics 2014 1. In a general partnership all the partners are classified as "generalpartners," each of whom has unlimited liability for the debts of the partnership. *a. Trueb. False2. When a corporation has been dissolved under local law because of failure to file its annual franchise tax returns but continues to operate in its former fashion, it is always treated as a partnership under both state law and the Internal Revenue Code. a. True*b. False3. A joint venture entered into with equal contributions by a corporation (whose sole stockholder is incompetent), a trust for a minor child, the estate of a deceased person, and another partnership cannot qualify as a "partnership" under the Internal Revenue Code. a. True*b. False4. The co-ownership of business property, where minimal services are provided by the owners for their tenants, constitutes a partnership forfederal income tax purposes. a. True*b. False5. The tax laws allow partners to include as part of the tax basis in their partnership interests their respective shares of partnership liabilities. *a. Trueb. False6. The partnership's beginning tax basis in property it receives from apartner in exchange for an interest in partnership capital is the contributing partner's adjusted basis in the property.
*a. Trueb. False7. When contributed property is sold by the partnership, the recognizedgain or loss is allocated among the partners in accordance with the terms in the partnership agreement. a. True*b. False8. When a partner contributes inventory to a partnership in exchange for an interest in the partnership, the subsequent gain or loss realized by the partnership upon the sale of the inventory is ordinary income or loss, no matter how long it is held or how it is used by the partnership. a. True*b. False9. When a partner contributes unrealized receivables to a partnership in exchange for an interest in the partnership, the subsequent gain or loss realized by the partnership upon the collection of the receivablesis always ordinary income or loss. *a. Trueb. False10. When a partner contributes a capital asset to a partnership in exchange for an interest in the partnership, the entire subsequent gainor loss realized by the partnership upon the sale of the capital asset is capital gain or loss if the property is sold within five years of when it is contributed. a. True*b. False11. As a general rule, when a person obtains an interest in partnershipcapital through rendition of services, ordinary income is recognized tothe extent of the fair market value of the interest received. *a. Trueb. False12. Generally, neither the partner nor the partnership recognize gain or loss on the contribution of property to the partnership in exchange for an interest in the partnership's capital and profits.
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- Spring '10
- Limited partnership, partner