Deck 18 Flashcards Preview

Regulation > Deck 18 > Flashcards

Flashcards in Deck 18 Deck (20):
1

What does liabilities relieved of do to a taxpayers amount realized?

Increases the amount realized

2

Hot Assets (Section 751a assets) includes

Unrealized receivable and appreciated property; any gain from hot assets is ordinary income

3

Initial basis for contributing partner includes:

Cash contributed, property (adjusted basis), (liabilities) - assumed by other partners, services (FMV), Liabilities assumed by incoming by incoming partner

4

Partnership's basis for contributed party;

NBV or debt assumed

5

Partnership's year end basis =

Capital account + partner's share of liabilities

6

Tax losses are limited to what?

Tax basis

7

How are losses in excess of at-risk limitation treated?

Carried forward until the partner generates additional at-risk amounts

8

Definition of guaranteed payments

Reasonable compensation paid to a partner for services

9

Guaranteed payments tax treatment

Allowable tax deduction to the partnership; Taxable income to the partner

10

Form 1065

Return of Partnership income

11

Schedule K

Partner's distributive share items

12

Schedule K-1

Partner's share of income, deductions, and credits; each partner gets one

13

Basis for non liquidating distribution

Stop at zero; Partner's adjusted basis - cash received from distribution - any other distributions

14

Three ways a partner may liquidate a partnership interest:

1) complete withdrawal; 2) sale of partnership interest; and 3) retirement or death

15

Basis for complete liquidation (nontaxable liquidation)

Beginning capital account + % income + % of liabilities = adjusted basis; must zero-out account

16

Gain or loss on transferring a partnership interest (another form of liquidation) =

Beginning capital account + % income + % liabilities = adjusted basis; adjusted basis - amount received = gain or loss

17

Retirement or Death of Partner (form of liquidation)

Payments for the interest in partnership assets result in capital gain or loss

18

What amount of gain is taxable for a current distribution?

absolutely zero

19

What kind of asset is an automobile for personal use? capital asset or section 1231 asset?

Capital asset

20

If the proper waiver is filed, medical expenses paid for the decedent by her executor within one year of her death can be deducted on the decedent's:

final income tax return