Indicate whether the following statements are "True" or "False" regarding self-employment tax and § 1411 tax.a. Self-employment income includes a general partner's distributive share of income from a partnership's trade or business, whether or not that income is distributed. b. For both general and limited partners, any guaranteed payments for services are subject to the self-employment tax. c. Certain types of income allocated from a partnership are treated as net investment income, including dividends, interest, passive income, and gains from property not used in a trade or business. d. A partner's distributive share is not considered net investment income if the partner is a "passive" investor, as defined under § 469.

Self Employment Tax Self employed individuals may be liable to self employment taxes. 12.40% for…

Answered: Indicate whether the following…

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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Indicate whether the following statements are "True" or "False" regarding self-employment tax and § 1411 tax.

a.	Self-employment income includes a general partner's distributive share of income from a partnership's trade or business, whether or not that income is distributed.
b.	For both general and limited partners, any guaranteed payments for services are subject to the self-employment tax.
c.	Certain types of income allocated from a partnership are treated as net investment income, including dividends, interest, passive income, and gains from property not used in a trade or business.
d.	A partner's distributive share is not considered net investment income if the partner is a "passive" investor, as defined under § 469.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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