5. Which of the following itemsdo not retain their character asthey flow through to thepartnership? More than oneanswer may be correct.a. Long-term capital gains.b. Short-term capital gains.c. Depreciation recaptureincome.d. Dividend income.6. Sal and Nan owned 90% and10% of the SN Partnership,respectively. SN operated afoundry. Sal sold stock inExxonMobil with a basis of$4,000 to the partnership for$6,000. The amount andcharacter of gain recognized toSal is:a. $0.b. $2,000 ordinary.c. $2,000 capital gain.d. $6,000 ordinary.7. Sal and Nan owned 90% and10% of the SN partnership,respectively. SN operated afoundry. Sal sold a machine,capital asset to him but to beused in the SN businessoperations, with a basis of $4,000to the partnership for $6,000. Theamount and character of gainrecognized to Sal is:a. $0.b. $2,000 ordinary.c. $2,000 capital gain.d. $6,000 ordinary.

5. Which of the following items do not retain their character as they flow through to the partnership? More than one answer may be correct. a. Long-term capital gains. b. Short-term capital gains. c. Depreciation recapture income. d. Dividend income.

5. Which of the following items do not retain their character as they flow through to the partnership? More than one answer may be correct. a. Long-term capital gains. b. Short-term capital gains. c. Depreciation recapture income. d. Dividend income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

5. Which of the following items
do not retain their character as
they flow through to the
partnership? More than one
answer may be correct.
a. Long-term capital gains.
b. Short-term capital gains.
c. Depreciation recapture
income.
d. Dividend income.
6. Sal and Nan owned 90% and
10% of the SN Partnership,
respectively. SN operated a
foundry. Sal sold stock in
ExxonMobil with a basis of
$4,000 to the partnership for
$6,000. The amount and
character of gain recognized to
Sal is:
a. $0.
b. $2,000 ordinary.
c. $2,000 capital gain.
d. $6,000 ordinary.
7. Sal and Nan owned 90% and
10% of the SN partnership,
respectively. SN operated a
foundry. Sal sold a machine,
capital asset to him but to be
used in the SN business
operations, with a basis of $4,000
to the partnership for $6,000. The
amount and character of gain
recognized to Sal is:
a. $0.
b. $2,000 ordinary.
c. $2,000 capital gain.
d. $6,000 ordinary.

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