Taxes & Tax Shelters - Test Questions

Question 1

Are short term, long term gains and ordinary income taxable to a LP?

Answer 1

NO

Question 2

Repayment of partnership loan principal will ________ the tax basis

Answer 2

decrease

Question 3

When computing cash flow from operations for an LP, principal repayment is or is not included?

Answer 3

Is included

Question 4

Principal repayment is or is not included in calculating the tax basis at year end?

Answer 4

Is included

Question 5

Real estate investment trusts are direct participation programs. T/F

Answer 5

FALSE - they are not, they are investment companies

Question 6

The principal benefit of an O&G program are the _____ which are 100% deductible as drilled

Answer 6

initial drilling costs (IDCs)

Question 7

IDCs consist of _______

Answer 7

labor, fuel, rental, and materials expenses with no salvage value

Question 8

All taxpayers are required to do the AMT assessment. T/F

Answer 8

True - although typically it only applies to those invested in LPs

Question 9

Tax credits are included in the AMT calculation. T/F

Answer 9

False - neither is straight line

Question 10

If an LP is offered as a “managed lp offering”, the underwriter takes on ______ and the offering is effected on a ______ basis

Answer 10

takes on financial liability and is effected on a firm commitment basis