16. In general, a partnership must have the same tax year as that of its partner

Question

16. In general, a partnership must have the same tax year as that of its partners holding greater than a 50 percent interest in its capital or profits.

True

False

17. The 80 percent dividends received deduction assures that a minimum of 80 percent of dividend income from qualified domestic corporations will be deducted by a more than 20 percent corporate shareholder.

True

False

18. A corporation's alternative minimum taxable income would have to be greater than $40,000 before it would be subject to the alternative minimum tax.

True

False

19.As long as the corporation has current E&P, a distribution may be treated as having come from current E&P, even if the corporation has a deficit balance in its accumulated E&P.

True

False

20. Losses resulting from a sale between related parties are disallowed for tax purposes, but nonetheless affect a corporation's ability to pay dividends, and accordingly reduce the corporation's E&P.

True

False

21. Interest from state and local government bonds is exempt from federal income tax; however, the interest is included in the calculation of E&P.

True

False

22. When the partnership and its partners do not use the same tax year, the tax laws require that each partner's allocable share of partnership items be reported in that partner's tax year that includes the year-end of the partnership.

True

False

23. A partner never recognizes a loss when he receives a current distribution from the partnership.

True

False

24. Examples of transactions that may be recharacterized as constructive dividends include:

loan by a shareholder to the corporation.

unreasonable compensation.

overpaying for a shareholder's property.

All of the above.

25. If a corporation makes a distribution that results in a taxable dividend that is included in shareholders' gross income:

the corporation's E&P must be reduced by the depreciated value of the distribution.

the corporation's E&P must be reduced by the taxable amount of the distribution.

the corporation does not reduce its E&P.

None of the above.

26. Beane Office Equipment, Inc. distributed $5,000 in cash plus land with an adjusted basis of $90,000 and a fair market value of $75,000 to its sole shareholder. The land was subject to a $40,000 mortgage. What is the amount of the distribution?

5000

20000

40000

95000

loan by a shareholder to the corporation.

unreasonable compensation.

overpaying for a shareholder's property.

All of the above.

Explanation / Answer

16.

In general, a partnership must have the same tax year as that of its partners holding greater than a 50 percent interest in its capital or profits.

The above statement is true.

Explanation:

Unless the partnership has made an election under section 444, the partnership's tax year should be same as that of a partner who owns a majority interest that is more than 50% in the partnership.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.