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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
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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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.
Transcribed Image Text: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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