Day 28 Flashcards
When is a partnership considered terminated for income tax purposes?
When the partnerships business and financial operations are discounted
MCQ-01704
In the absence of an election to adopt an annual accounting period, the partnerships required tax year is:
A tax year of one or more partners with 50% interest in profit and capital
MCQ-06511
What is the Section 444 election for a partnership?
Election to use a different tax year
- Tax year is determined by 50% or more partners tax year
- Deferral period is 3 months or less than the required tax year end
MCQ-12548
When calculating ordinary income of a partnership, is charitable contributions a deduction?
No
MCQ-04027
What does a guarantee payment do to the partnership and partners income/basis?
Partnership - treated as a deduction from ordinary income
Partner - increase 1040 ordinary income and has no effect on the individuals tax basis
MCQ-01700
If a partnership does not distribute CY income to the Partner’s, is it taxable to the Partner’s 1040?
Yes, income not distributed is still reported on K-1 and reported on the 1040
HINT: “FLOW-THROUGH ENTITY”
MCQ-01755
Org Costs & Start-Up Costs include:
Org. Costs
- Accounting fees
- Legal fees
Start-Up Costs
- Training costs
- Advertising costs
- Testing costs
NOTE: Cannot deduct syndication costs such as offerings / printing stock
MCQ-01710
