l Verizon 8:21 PM Done ACC 4302 Exam # 3 (Spring) Chapters 10 & 11 Name Date Tru
ID: 2554830 • Letter: L
Question
l Verizon 8:21 PM Done ACC 4302 Exam # 3 (Spring) Chapters 10 & 11 Name Date True/False (5 Points) 1. The primary purpose of the partnership agreement is to document the various tax election:s made by the partners regarding depreciation methods, treatment of research and experimental costs, calculation of the S 199 deduction, and the 754 election. 2. Ken and Lars formed the equal KL Partnership during the current year, with Ken contributing $100,000 in cash and Lars contributing land (basis of S60,000, fair market value of $40,000 and equipment (basis of $O, fair market value of 60,000). Lars recognizes a S40,000 gain on the contribution and his basis in his partnership interest is $100,000 3. Section 721 provides that no gain or loss is recognized on a contribution of property to a partnership in exchange for an interest in the partnership. An taxpayer receives a cash distribution from the partnership contribution is made. exception might apply if the soon after the property 4. The ELF Partnership distributed $20,000 cash to Emma in a proportionate, current interest was S12,000 distribution, Emma's basis is reduced (nonliquidating) distribution. Emma's basis in her partnership immediately before the distribution. As a result of the to S0 and she recognizes an $8,000 gain.Explanation / Answer
1. The primary purpose of the partnership agreement is not to document the various tax elections made by the partners regarding depreciation methods, treatment of research and experimental costs, calculations of the 199 section deduction, and 754 section election. Therefore, the given statement is FALSE.
2. The given statement is FALSE. Because, Lars basis in his partnership interest would be $ 60,000 and not $100,000. Therefore, the given statement is FALSE.
3. The given statement is TRUE.
4. The given statement is TRUE. Emma's basis is reduced to $0 and she would recognize $8,000 gain on receiving the distribution from partnership.
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