CHAPTER 20--CORPORATIONS AN

True 68 jenny contributes land adjusted basis of

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TRUE 68. Jenny contributes land (adjusted basis of $300,000; fair market value of $280,000) and cash of $40,000 to the newly formed Green Partnership. Green will have a basis in the land of $280,000. FALSE 69. The holding period to the partnership of property contributed by a partner includes the period during which the property was held by the contributing partner. TRUE 70. A partnership’s ordinary income or loss is computed without considering any foreign taxes paid. This item is separately stated and passes through to the individual partners. TRUE 71. The domestic production activities deduction is determined at the partnership level and then passed through to each individual partner based on his or her partnership interest. FALSE 6
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72. Partners cannot deduct partnership losses that exceed the basis in their partnership interests. TRUE 73. Jordan and his two brothers are equal owners in Taupe Partnership. If Jordan sells business property (basis of $230,000; fair market value of $180,000) to Taupe for $180,000, he can recognize the $50,000 realized loss. FALSE 74. Guaranteed payments are deductible by the partnership and are taxable to the partner receiving the payments. TRUE 75. Which of the following, if any, incorrectly characterize the check-the-box Regulations? A. A one-owner business is a sole proprietorship if default (no election is made) occurs. B. A one-owner business cannot elect to be taxed as a corporation. C. If default (no election is made) occurs, a limited liability company is taxed as a partnership. D. The check-the-box Regulations do not apply to entities that are already incorporated under state law. E. None of the above. 76. Which of the following, if any, correctly describe the status or nature of limited liability companies? 77. Which, if any, of the following rules relate only to the income taxation of C corporations?
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  • Spring '12
  • honig
  • Corporation, Income tax in the United States, C CORPORATION

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