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Prentice Hall's Federal Taxation 2012: Corporations, 25e (Pope/Anderson/Kramer)
Chapter C9 Partnership Formation and Operation
1) Formation of a partnership requires legal documentation filed with the Secretary of State.
Answer: FALSE
Page Ref.: C:9-2
2) A partner's basis for his partnership interest can be negative.
Answer: FALSE
Page Ref.: C:9-4
3) The holding period of a partnership interest acquired in exchange for a contributed capital asset begins on the date the partner transfers the asset to the partnership.
Answer: FALSE
Page Ref.: C:9-8
4) A partnership cannot make charitable contributions.
Answer: FALSE
Page Ref.: C:9-16
5) ABC Partnership distributes $12,000 to partner Al. Al's distributive share of partnership income is $20,000. Al is taxed on $20,000.
Answer: TRUE
Page Ref.: C:9-17
6) A partner's "distributive share" is the partner's share of any assets distributed by the partnership.
Answer: FALSE
Page Ref.: C:9-17
7) A partner's share of nonrecourse debt increases that partner's share of basis.
Answer: TRUE
Page Ref.: C:9-22
8) A partner's basis for his or her partnership interest is increased by his share of the partnership's tax-exempt income.
Answer: TRUE
Page Ref.: C:9-24
9) Limited partners must consider the at-risk, basis, and passive loss limitations when determining the amount of their deductible loss.
Answer: TRUE
Page Ref.: C:9-26 and C:9-27
10) No gain is recognized on the sale of property between a partnership and a more-than-50% partner.
Answer: FALSE
Page Ref.: C:9-28
11) Guaranteed payments are always ordinary income to the recipient.
Answer: TRUE
Page Ref.: C:9-28
12) A partnership must file Form 1065 only if its income exceeds $1,000.
Answer: FALSE
Page Ref.: C:9-32
13) Identify which of the following statements is true.
A) Formation of a partnership requires legal documentation.
B) An individual engaged in the active conduct of a business...