Mid June Quizzes Flashcards
Section 1231 net gains are treated as…
2) what can they do?
1 long term capital gains
2 can offset against long term capital loss
In a complete liquidation, $12,000 fair market value of inventory with a basis of $8,000 distributed to a shareholder results in a…
$4,000 LT capital gain
In a complete liquidation, equipment distributed to a shareholder where FMV exceeds basis results in…
A long term capital gain
In a complete liquidation of an 80% owned corporation, the liquidation qualifies under…
Section 332 as nontaxable liquidation
Sec. 332 is a nontaxable liquidation of…
A controlled subsidiary into its parent
In section 332 liquidation sale, with liquidating corporation, how are distributions to shareholders owning less than 80% recognized?
1 Gains are recognized
2 losses are not recognized
In section 332 liquidation sale, with liquidating corporation, how are distributions to shareholders at least 80% recognized?
No gain or loss is recognized
Salaries and wages paid, where does it go on the partnership return?
Form 1065 only
Work opportunity credit, where does it go on the partnership return?
Schedule K and schedule K-1
If a SIM doesn’t specify other than the partners have equal interest in profit and loss, how are guaranteed payments divided up on schedule K-1?
Multiply by 50%
On form 1065, is amortization of the permanent liquor license allowed for tax purposes? Why or why not?
No allowed
Because license is renewable for an indefinite period
If a partnership has depreciation of $110,000 and elects to expense $100,000. How much depreciation can be deducted on form 1065?
$10,000 ($110,000 - $100,000)
Health insurance premiums are treated as…
Guaranteed payments
On a simulation market insurance premiums would appear on what forms of a partnership return?
1065, sch. k and sch. K-1
With $14,000 of contributions to a defined pension benefit plan (Keogh), where $8,000 was paid on behalf of the partner’s, where does this go on the partnership return?
Form 1065 = $6,000 (14k-8k)
Form K = $8,000
Form K-1 = $4,000 (8k X 50%)
On a SIM that deals completely with expenses, do not use…
Paratheses
Under the Negotiable Instruments Article of the UCC, which of the following defenses generally may be used against all holders of negotiable instruments?
Minority of the maker
Minority of the maker is a…2
1 Real defense
2 assertable against any party
Voluntary bankruptcy is available to debtor’s whose…
Income does not exceed monthly limits
A tenant may be evicted from an apartment if he…
Uses it for illegal purposes (counterfeiting money)
In deciding whether consideration necessary to form a contract exists, a court must determine whether…
There is mutuality of consideration
Mutuality of consideration, means that each party is bound to…
Give consideration in exchange for the consideration given by
Other party to contract
State taxes of a corporation have a higher priority than…
Legal fees owed to law firm for services unrelated to bankruptcy
What provision contained in an otherwise negotiable instrument will cause it to be nonnegotiable?
It grants holder an option to purchase land
If an instrument contains a promise to do any act in addition to payment of money it is…
Nonnegotiable