Question 1

Any losses that exceed the tax basis of a partner in their partnership interest are suspended and carried forward for 20 years.

Accepted Answer

A) True 
 B)False

Question 2

Sarah, Sue, and AS Inc. formed a partnership on May 1, 20X9 called SSAS, LP. Now that the partnership is formed, they must determine its appropriate year-end. Sarah has a 30% profits and capital interest while Sue has a 35% profits and capital interest. Both Sarah and Sue have calendar year-ends. AS Inc. holds the remaining profits and capital interest in the LP, and it has a September 30 year-end. What tax year-end must SSAS, LP use for 20X9 and which test or rule requires this year-end?

Accepted Answer

A)   9/30, majority interest taxable year.
B)   12/31, majority interest taxable year.
C)   12/31, principal partners test.
D)   12/31, least aggregate deferral test.E) None of the above
F) A) and C)

Question 3

In each of the independent scenarios below, how does the partner or partnership determine its holding period in the property received?
a. A partner contributes property in exchange for a partnership interest
b. The partnership receives contributed property
c. A partner contributes services in exchange for a partnership interest
d. A partner purchases a partnership interest from an existing partner

Accepted Answer

a. When a partner contributes property t...

Question 4

Illuminating Light Partnership had the following revenues, expenses, gains, losses, and distributions:
  
Given these items, what is Illuminating Light's ordinary business income (loss) for the year?

Accepted Answer

($28,000),...

Question 5

A partner's tax basis or at-risk amount can be increased by making capital contributions, by paying off partnership debt, or by increasing the profitability of the partnership.

Accepted Answer

A) True 
 B)False

Question 6

XYZ, LLC has several individual and corporate members. Abe and Joe, individuals with 4/30 year-ends, each have a 23% profits and capital interest. RST, Inc., a corporation with a 6/30 year end, owns a 4% profits and capital interest while DEF, Inc., a corporation with an 8/30 year end, owns a 4.9% profits and capital interest. Finally, thirty other calendar year-end individual partners (each with less than a 2% profits and capital interest)  own the remaining 45% of the profits and capital interests in XYZ. What tax year-end should XYZ use and which test or rule requires this year-end?

Accepted Answer

A)   4/30, principal partners test.
B)   4/30, least aggregate deferral test.
C)   12/31, principal partners test.
D)   12/31, least aggregate deferral test.E) All of the above
F) None of the above

Exam 9: Forming and Operating Partnerships

Illuminating Light Partnership had the following revenues, expenses, gains, losses, and distributions: Given these items, what is Illuminating Light's ordinary business income (loss) for the year?

Correct Answer
verified
($28,000),...
View Answer

Any losses that exceed the tax basis of a partner in their partnership interest are suspended and carried forward for 20 years.

Correct Answer
verified

A partner's tax basis or at-risk amount can be increased by making capital contributions, by paying off partnership debt, or by increasing the profitability of the partnership.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. When a partner contributes property t...
View Answer

Exam 9: Forming and Operating Partnerships

Illuminating Light Partnership had the following revenues, expenses, gains, losses, and distributions: Given these items, what is Illuminating Light's ordinary business income (loss) for the year?

Correct Answerverified($28,000),...View AnswerShow Answer

Any losses that exceed the tax basis of a partner in their partnership interest are suspended and carried forward for 20 years.

Correct AnswerverifiedShow Answer

A partner's tax basis or at-risk amount can be increased by making capital contributions, by paying off partnership debt, or by increasing the profitability of the partnership.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverifieda. When a partner contributes property t...View AnswerShow Answer

Correct Answer
verified
($28,000),...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. When a partner contributes property t...
View Answer