Round 2 Random MCQ

Question 1

For related party transactions do you recognize gain or loss? When do you?

Answer 1

No, and only when it is sold to an unrelated party

Question 2

Is taxable distribution synonymous with partner gain from distribution? If yes, how is it calculated?

Answer 2

Yes, it is. The taxable amount is any distribution in excess of the basis.

Question 3

Partner gain recognized from the selling of partnership interest would be = the amount realized - partners basis. How is realized calculated?

Answer 3

Cash recivede + (liabilities releases x %)

Question 4

The cash distribution will affect a partner’s basis but not their income? T/F

Answer 4

T

Question 5

Amount of income recognized under the installment method calculation:

Answer 5

SP - basis = GP
GP/ SP = GP %
amount recived that is asked in the question x GP%

Question 6

Does a general partnership need to file papers in the creation of its business?

Answer 6

No GP does not need to file papers during incoorporation

Question 7

Do creditors have the right to take possesion of collateral without judicial process?

Answer 7

Yes

Question 8

Private letter rulings are about specific rules? T/F

Answer 8

T

Question 9

Do partners assume liability on loans taken out by the partnership? Do partners assume liabilities from partners obtaining partnership %?

Answer 9

No

Yes

Question 10

Under what age does a dependent child have to be to be covered by kiddie tax? and what tyoe of income is covered by kiddie tax?

Answer 10

24
unearned income (ex: gifted CD)

Question 11

A partner can only deduct their amount of loss only to the extent of their at risk amount. T/F

Answer 11

T

Question 12

If a charitable contribution wouldve been a LT gain if sold you should use the FMV. T/F. If it wouldnt have been a LT gain you would use the basis of the contribution. T/F.

Answer 12

T

T

Question 13

A 1231 gain can only happen if you sell an asset that has been held for more than __ months and the asset comprised of personal/real property used in business

Answer 13

12

Question 14

If statute of frauds do not apply, contract terms are enforcable. T/F

Answer 14

T

Question 15

In consolidated income is capital gain included?

Answer 15

Yes, it is

Question 16

For calculating M-1 is corporate bond interest income ignored?

Answer 16

Yes

Question 17

Are AMT tax preference items ordinary or extraordinary items?

Answer 17

extraordinary

Question 18

Is tax exempt income included in AGI?

Answer 18

No

Question 19

If you inherent a gift what is the basis? What if FMV is lower than roll over basis?

Answer 19

Usually you would roll over the basis from the donor, if FMV is less than the basis then the basis is FMV

Question 20

Can you deduct loss from a partnership? How much loss & how is it calculated?

Answer 20

A partner can deduct loss up to the amount of their basis calculation (excluding the loss)

Question 21

If no partnership agreement exists how will the profits be distributed amoungst the partners?

Answer 21

equally

Question 22

Are misc items and charity amounts deducted from AGI? Ar they above the line or below the line?

Answer 22

No because theyq are below the line deductions

Question 23

If a partner contributes property for -80% interest what does the partnership use as basis in that item? If a partner contributes property for +80% interest what does the partnership use as basis in that item?

Answer 23

-80% = FMV
\+80% = Basis

Question 24

Qualified business deduction is ___% of income

Answer 24

20%

Question 25

bond premium amortization can be used to offset ___ and computed under ___ ___ ___ ___.

Answer 25

income

constant yeild maturity method

Question 26

The maximum amount of passive loss that you can deduct from income is $__K. If your AGI is about ___K you cannot deduct any amount

Answer 26

25K

150K

Question 27

When calculating the income for charitble contribution limitation make sure to ignore ___

Answer 27

DRD

Question 28

Change in _____, new/leaving ___ & ____, bankruptcy, credit ____, or a sale of assets not in the ordinary course of business must be reported to the SEC.

Answer 28

auditors
C suite & directors
defaults

Question 29

A company is not liable for employees torts if they were committed outside of the scope of the company. Give an example:

Answer 29

The company wouldnt be liable for an employees fuck ups if company didnt want employee to use a gun but the employee did anyway

Question 30

All ____ expenses need to be paid in order to have a bankruptcy reorginization.

Answer 30

admin

Question 31

A corporations basis for a preperty rec would be the carry over _____ and the amount of ____ corporation contributes to the SH

Answer 31

basis

cash

Question 32

statute of limitations generally commences on the date of _____

Answer 32

breach

Question 33

If error on tax return is less than 25% (or simple mistake) IRS has _ years to investigate, if there is an error more than 50% IRS has _ years to investigate

Answer 33

3

6

Question 34

Lifetime taxable gifts and transfers at death or taxed on a ____ basis

Answer 34

cumulative

Question 35

even if a seller ships non-conforming goods its still counted as an acceptance of the offer. T/F

Answer 35

T

Question 36

Refunds (are/are not) part of gross income. Pension distribution (are/are not) part of gross income.

Answer 36

are not

are

Question 37

When calculating DRD you should use the income before ____ ___ ___ if availible

Answer 37

Dividend recieved deduction

Question 38

Contributions are maxed out at 6K. However if youre __+ years old the contributions are allowed to be 7K

Answer 38

50

Question 39

179 deduction maximum is

Answer 39

$1,040,000

Question 40

A financing statement needs: Description of the types of _______. Name and address of the ______. Name and address of the _______.

Answer 40

collateral
debtor
creditor

Question 41

A federal tax return must be filed for estates above $___M

Answer 41

11.5