Deck 36

Question 1

Purpose of an operating agreement for an LLC?

Answer 1

Designed to forestall and resolve disputes among the owners

Question 2

LLCs are taxed as what kind of entity?

Answer 2

Partnership

Question 3

Unemployment tax payable under FUTA is:

Answer 3

Tax deductible employer’s expense

Question 4

Apparent authority of a partner to bind a partnership in dealing with third parties will be:

Answer 4

Effectively limited by a formal resolution of the partners of which third parties are aware

Question 5

Articles of incorporation must include:

Answer 5

Name and address of registered agent, name of corporation, name and address of incorporators, and number of shares authorized

Question 6

When a bank accepts a check, all previous parties on the check are:

Answer 6

Discharged from liability

Question 7

Debt holders do not have what in a corporation?

Answer 7

Ownership interest (common shareholders do)

Question 8

Example of a non-fundable credit:

Answer 8

Retirement savings contribution credit

Question 9

A reorganization is tax-free to:

Answer 9

All corporations and shareholders

Question 10

What kind of losses are not deductible?

Answer 10

personal losses

Question 11

A revocation is only effective when it is:

Answer 11

Received

Question 12

Firm offer only applies to the sale of:

Answer 12

Goods

Question 13

A taxpayer may file a claim for refund the later of:

Answer 13

3 years from the original due date or 2 years from the date the tax was paid

Question 14

What amount of ordinary income should a partner report on his current year income tax return from the sale of his partnership interest?

Answer 14

1/3 of unrealized receivables

Question 15

Gain recognized when buying shares with CASH for stock?

Answer 15

No gain

Question 16

Student loan interest is what kind of deduction?

Answer 16

Deduction for AGI

Question 17

What kind of deduction is used for mortgage interest?

Answer 17

Itemized deduction

Question 18

A contribution is deductible for an accrual basis corporation if it meets two rules:

Answer 18

1) It was authorized before the end of the year; and 2) It was paid by the 15th day of the 3rd month after the end of the taxable year

Question 19

There is no gain or loss recognized when a partner contributes property to a partner in exchange for:

Answer 19

A partnership interest

Question 20

How does paying boot effect the basis?

Answer 20

Increases the basis

Question 21

Examples of separately stated items:

Answer 21

Charitable contributions, dividend income, and net short-term capital losses

Question 22

Example of an item that is not allowed as itemized deduction for AMT purposes:

Answer 22

Miscellaneous itemized deductions

Question 23

Contributions of short-term property are generally deductible at the lower of:

Answer 23

Cost or FMV

Question 24

Non-seperatly stated items is synonymous with the term:

Answer 24

Ordinary income (ordinary business revenue and expenses)

Question 25

To qualify for the section 179 expense, the property must be both:

Answer 25

Tangible property to be used in the trade or business and be unrelated