Partnership MC - Partnership MC Q.1 Mr. A has a one-third...

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Partnership MC Q.1 Mr. A has a one-third interest in the profits and losses of ABC Partnership. ABC’s ordinary income for the 2007 calendar year is $30,000, after a $3,000 deduction for a guaranteed payment made to Mr. A for services rendered. None of the $30,000 ordinary income was distributed to the partners. What is the total amount that Mr. A must include from ABC as gross income in his 2007 tax return? A. $3,000 B. $11,000 C. $10,000 D. $13,000 Q.2 A guaranteed payment by a partnership to a partner for services rendered may include an agreement to pay I. A salary of $10,000 monthly without regard to partnership income. II. A 10% interest in partnership profits. A. I only B. I and II C. II only D. Neither I or II Q.3 When a partner’s share of partnership liabilities increases, that partner’s basis in the partnership A. Decrease by the partner’s share of the increase B. Increase by the partner’s share of the increase C. Not affected D. Decrease but not less than zero Q.4 John’s adjusted basis for his partnership interest in CPA Company was $24,000. In complete liquidation of his interest in CPA John received cash of $4,000 and realty having a fair market value of $40,000. CPA’s adjusted basis for this realty was
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This note was uploaded on 12/08/2009 for the course ACCT REG 5744 taught by Professor Smith during the Spring '09 term at Nova Southeastern University.

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Partnership MC - Partnership MC Q.1 Mr. A has a one-third...

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