R5&R6 Flashcards

1
Q

What pair of business entities can make a distribution of appreciated property to its owners that is not taxable to owners?

A

GP and LLP

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2
Q

Does an accountant need to obtain client permission from client to show records to prospective buyer?

A

No - as long as the prospective buyer does not disclose th any confidential information.

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3
Q

What are the 5 elements of common law fraud?

A
  1. Misrepresentation of material fact
  2. SCIENTER (intent to deceive)
  3. Actual & Justifiable reliance
  4. Intent to induce reliance
  5. Damages
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4
Q

What is the main difference for the exam for fraud vs negligence?

A

Due care = negligence

Scienter = frau

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5
Q

What are the 4 elements of Common Law Negligence?

A
  1. defendant owed a duty of care to plaintiff
  2. defendant breached duty of care
  3. the breach was the actual & proximate cause of the loss
  4. Plaintiff suffered damages
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6
Q

The burden of proof shifts to the IRS from the taxpayer in what penalty?

A

aiding and abetting

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7
Q

When forming a corporation - when the control group represents 80% how is boot recognized?

A

Boot is recognized to the extent that liabilities exceed NBV

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