The profits of a general partnership: are not taxable unless the partnership has over $100,000 in net income. cannot exist unless the partnership has a limited partner. pass through the business to the partners. are not taxable to the individual partners.

The profits of a general partnership: are not taxable unless the partnership has over $100,000 in net income. cannot exist unless the partnership has a limited partner. pass through the business to the partners. are not taxable to the individual partners.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 5BCRQ

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A partnership ________. A. has one owner B. can issue stock C. pays taxes on partnership income D. can have more than one general partner
1. A partnership has four equal partners who share profits and losses in accordance with their respective interests. It has $400,000 in taxable income but doesn't distribute any cash to the partners. a. What amount of income will the partnership report on its tax return? None. There is no business income tax on a partnership. b. What amount of the partnership's taxable income will be subject to tax at the partnership level? c. Will each partner recognize taxable income from their interest in the partnership? If so, how much? d. If ABC was a corporation with four equal owners, how would this change your answers in parts (a)- (c)?
Which of the following statements regarding partnerships is true? a. Partnership income is taxed in the partnership. b. Partnership losses cannot be offset against the partners other income c. Partnership income is included in a partners income in the year of disbursement. d. Partnerships may earn business income, property income, and capital gains.
Because guaranteed payments are treated the same as a payment to a non-partner, they: A. Will never decrease the partnership's ordinary income below zero. B. Are deducted against ordinary income first and then against separately stated income. C. Require the partnership to issue a Form 1099-MISC. D. Are generally deducted as a business expense by the partnership.
In a general professional partnership (GPP): The GPP shall report total taxable income The GPP shall be taxed on its income in the same manner as corporate taxpayers The partners are not liable for taxes on income withdrawn from the partnership None of the above
What is the difference in treatment when an incoming partner purchases an interest by agreeing to perform services for the partnership and the partnership (1) gives a 25 percent interest in the capital of the partnership, (2) gives a 25 percent interest in the future income of the partnership, or (3) gives a 25 percent interest in the partnership's future income which the incoming partner must forfeit if the partnership, as reconstituted after the incoming partner's admission, is unable to earn an average of $100,000 profit for the ensuing five years?
Which of the following statements is correct? O A. The liability of the partners for the debts of the partnership is limited to the amounts invested by each partner. O B. The lifespan of a partnership is perpetual. OC. A loan cannot be obtained in the name of the partnership. OD. A partnership business is liable for its own taxes on the profits earned.
A partnership * has only one owner. pays taxes on partnership income. must file an information tax return. is not an accounting entity for financial reporting purposes.
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If no agreement exists in a partnership as to the allocation of income, what method is appropriate? a. receives equal allocations. b. receives an amount equal to their contributions. c. receives amounts based on their balance in their partnership capital accounts. d. receives an amount equal to the losses.
Which of the following statements about partnerships is true? Group of answer choices a)Partnerships must file their tax returns on a calendar year basis. b)No gain or loss is ever recognized in transactions between partners and a partnership. c)Gain is never recognized by a partner on a contribution of property to a partnership. d)A partner's initial basis in a partnership interest is equal to the basis of the property transferred (plus cash contributed) to the partnership, adjusted for any gain recognized on the transfer and reduced for liabilities assumed by the other partners. e)The partnership's basis in property contributed by a partner is equal to the fair market value of the property on the date of the transfer.
TRUE OR FALSE 22. Salary and interest allowances in a partnership do not affect the measurement of total partnership income. 23. Partnership drawings are withdrawals of the partners that are closed to the capital accounts at the end of the period. 24. When noncash property is contributed to a partnership, it is recorded in the books of the partnership at its fair value. 25. All property brought into the partnership or acquired by the partnership is partnership property. 26. If an asset is contributed to the partnership subject to liability, the amount credited to the contributing partners' capital account is it still equal to the fair market value of the asset. 27. It is possible to admit a new partner into the partnership without said partner investing any assets into the partnership. 28. If salary and interest allocation methods are being used to allocate partnership profits, such methods would not be applied in accounting periods when there is a partnership loss. 29. When an…