Chapter 10 Homework

Chapter 10 Homework - What is Clover's share of the...

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Chapter 10 Homework 1. A general partner usually cannot be held personally liable for the debts arising from the partnership business. True False 2. On June 1, Jefferson had a basis in his partnership interest of $75,000. On June 2, he received a cash distribution from the partnership of $28,000. All of the cash distribution is taxable. True False 3. A limited liability company with more than one member is generally considered a partnership for federal tax purposes. True False 4. Corporations cannot be shareholders in a Subchapter S corporation. True False 5. The shareholders of a Subchapter S corporation must pay self-employment tax on their share of the corporation's ordinary income. True False 6. Hay, Straw and Clover formed the HSC Partnership, agreeing to share profits and losses equally. Clover will manage the business for which he will receive a guaranteed payment of $30,000 per year. Cash receipts and disbursements for the year were as follows:
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Unformatted text preview: What is Clover's share of the partnership's ordinary income and guaranteed payment? A. Ordinary income, $30,000; Guaranteed payment, $10,000 B. Ordinary income, $20,000; Guaranteed payment, $10,000 C. Ordinary income, $30,000; Guaranteed payment, $30,000 D. Ordinary income, $20,000; Guaranteed payment, $30,000 7. General Partners are considered self employed. True False 8. Subchapter S Corporations must file corporate tax returns and pay any necessary taxes. True False 9. Steve and Jim formed a partnership on January 1 with cash contributions of $600,000 and $400,000, respectively. The partners agree to share profits and losses equally. The partnership immediately borrowed $200,000. What is Jim's tax basis in his partnership interest? A. $300,000 B. $400,000 C. $500,000 D. $600,000 10. General Partners should withhold social security tax on their guaranteed payments. True False...
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Chapter 10 Homework - What is Clover's share of the...

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